Exam 5: Efficiency and Equity

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the efficient quantity of doughnuts to produce each day?

Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11, then the total producer surplus is

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. How many cups of coffee per day will Jane buy?

The requirement that people in similar situations be treated similarly is called

The Wii is a wildly popular home video game console released by Nintendo. The Wii system was first available in the U.S. in November, 2006 and has sold more than 30 million units as of August 2010. The Wii retails for $199. Suppose Ahmed is willing to pay $230, Lana is willing to pay $175, and Bodie is willing to pay $300 for a Wii. If these three are the only consumers in the market, what is the value of the market consumer surplus?

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. At the efficient quantity, the minimum supply-price of a DVD is ________ and the value of a DVD is ________.

-The figure above shows the market for milk. If one firm owns all the milk outlets in the city and sells 100 gallons of milk

The supplier of your ________ is most likely a monopoly.

-In the above figure, the lowest price for which the firm will sell its second ton of wheat is

-The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the consumer surplus?

When a market is in equilibrium, the total amount of consumer surplus must be ________ the total amount of producer surplus.

Asian women lag far behind the West in their representation in management level positions. The report by the McKinsley consulting company suggests that there is an opportunity for companies to recruit under-utilized female talent and do well financially as a result. (Source: The Economist, July 7, 2012) The fact that Asian women are currently less likely to be hired as managers is a result of the allocation system using which of the following methods for hiring?

Competitive markets with no external costs or benefits and no government price ceilings, floors, taxes or subsidies ________ efficient. According to the "It's not fair if the rules aren't fair" idea of fairness, competitive markets ________ fair.

All of the following statements about marginal benefit are correct EXCEPT the marginal benefit of a good

-In the figure above, when production is 3 units with a price of $3, the producer surplus in this market equals

In May 2008, Switzerland co-hosted the international soccer tournament Euro 2008. At that time, the Swiss potato industry association had been warning there could be a fry shortage because there was a potato shortage. The shortage meant that in the French fry market

Colorado State University allocates 10,000 tickets for each home game to students at no cost. Students are required to stand in line and prove they are a full time student to receive a free ticket. How is the scarce resource in this example allocated?

The opportunity cost to the firm of producing one more unit of output is also called marginal cost.

Often people trying to withdraw money from their bank must wait in line, which reflects a ________ allocation method.

The table below shows the supply schedules for Fred's Pizza and Johnny's Pizza, the only sellers of pizza in the market. -Using the table, what is the minimum price that Fred is willing to accept to supply 400 slices of pizza per month?