Question 1

-In the above figure,if the quantity is equal to 1,500,000 units,the deadweight is equal to

Accepted Answer

A)  area A + area B. 
B)  area C. 
C)  area B + area F. 
D)  area G + area H. 
E)  None of the above answers is correct because the deadweight loss is equal to zero. 
A)  area A + area B. 
B)  area C. 
C)  area B + area F. 
D)  area G + area H. 
E)  None of the above answers is correct because the deadweight loss is equal to zero. E

Question 2

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

Accepted Answer

The general approach to fairness that argues in favor of government redistribution is a "fair results approach," that is,an approach that argues "it isn't fair unless the results are fair." In this view,more (perhaps even complete)equality of income is the fairest income distribution.So this view asserts that government policies to redistribute income are necessary for fairness.

Question 3

Which of the following is true?
i.Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service.
ii.Producer surplus equals marginal benefit minus price,summed over the quantity produced.
iii.A supply curve is a marginal cost curve.

Accepted Answer

A)  only iii 
B)  only i 
C)  only ii 
D)  i and ii 
E)  i and iii 
A)  only iii 
B)  only i 
C)  only ii 
D)  i and ii 
E)  i and iii A

Question 4

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total producer surplus equals

Accepted Answer

A)  $0. 
B)  $60. 
C)  $90. 
D)  $120. 
E)  None of the above answers is correct. 
A)  $0. 
B)  $60. 
C)  $90. 
D)  $120. 
E)  None of the above answers is correct.

Question 5

Why is a competitive market efficient?

Accepted Answer

Efficiency is attained when production i

Question 6

To achieve ________,marginal cost ________ marginal benefit.

Accepted Answer

A)  production efficiency; must equal 
B)  production efficiency; must be greater than 
C)  allocative efficiency; must be greater than 
D)  allocation efficiency; must be less than 
E)  allocative efficiency; must equal 
A)  production efficiency; must equal 
B)  production efficiency; must be greater than 
C)  allocative efficiency; must be greater than 
D)  allocation efficiency; must be less than 
E)  allocative efficiency; must equal

Question 7

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

Accepted Answer

A person's share of the economic pie is

Question 8

6.7 Integrative Questions
  
-The figure above shows the market for brooms.If 400 brooms are produced,

Accepted Answer

A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  market failure and a deadweight loss occur. 
D)  marginal cost is greater than marginal benefit. 
E)  consumer surplus equals zero. 
A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  market failure and a deadweight loss occur. 
D)  marginal cost is greater than marginal benefit. 
E)  consumer surplus equals zero.

Question 9

The marginal benefit of each additional unit of a good consumed

Accepted Answer

A)  increases as more is consumed. 
B)  is always equal to its marginal cost. 
C)  decreases as more is consumed. 
D)  will maximize consumer surplus. 
E)  is equal to the deadweight loss if the unit of the good is not produced. 
A)  increases as more is consumed. 
B)  is always equal to its marginal cost. 
C)  decreases as more is consumed. 
D)  will maximize consumer surplus. 
E)  is equal to the deadweight loss if the unit of the good is not produced.

Question 10

The concept of "the invisible hand" suggests that

Accepted Answer

A)  products are produced out of a seller's sense of charity. 
B)  when the seller is better off, the buyer is worse off. 
C)  sellers exploit consumers with high prices. 
D)  buyers and sellers are self-interested. 
E)  the command system is the only way of efficiently allocating resources. 
A)  products are produced out of a seller's sense of charity. 
B)  when the seller is better off, the buyer is worse off. 
C)  sellers exploit consumers with high prices. 
D)  buyers and sellers are self-interested. 
E)  the command system is the only way of efficiently allocating resources.

Question 11

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A)  exceeds the marginal cost by as much as possible. 
B)  exceeds the marginal cost, but not by as much as possible. 
C)  is less than the marginal cost. 
D)  equals the marginal cost. 
E)  equals zero. 
A)  exceeds the marginal cost by as much as possible. 
B)  exceeds the marginal cost, but not by as much as possible. 
C)  is less than the marginal cost. 
D)  equals the marginal cost. 
E)  equals zero.

Question 12

A quantity less than the equilibrium quantity in a competitive market is inefficient because

Accepted Answer

A)  the marginal benefit of another unit is greater than its marginal cost. 
B)  too much of the good is being produced. 
C)  the marginal cost of another unit is greater than its marginal benefit. 
D)  the marginal benefit of another unit is not equal to zero. 
E)  the marginal benefit is not maximized. 
A)  the marginal benefit of another unit is greater than its marginal cost. 
B)  too much of the good is being produced. 
C)  the marginal cost of another unit is greater than its marginal benefit. 
D)  the marginal benefit of another unit is not equal to zero. 
E)  the marginal benefit is not maximized.

Question 13

The figure above shows the demand curve for pizza and the market price of pizza.
-In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

Accepted Answer

A)  $15 
B)  $10 
C)  $12 
D)  $22.50 
E)  $5 
A)  $15 
B)  $10 
C)  $12 
D)  $22.50 
E)  $5

Question 14

The supply curve of a good or service is the same as

Accepted Answer

A)  the demand curve. 
B)  the marginal benefit curve. 
C)  the marginal cost curve. 
D)  the total surplus curve. 
E)  None of the above answers is correct. 
A)  the demand curve. 
B)  the marginal benefit curve. 
C)  the marginal cost curve. 
D)  the total surplus curve. 
E)  None of the above answers is correct.

Question 15

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Accepted Answer

A)  marginal cost from price 
B)  price from marginal cost 
C)  marginal benefit from total benefit 
D)  marginal cost from marginal benefit 
E)  deadweight loss from the price 
A)  marginal cost from price 
B)  price from marginal cost 
C)  marginal benefit from total benefit 
D)  marginal cost from marginal benefit 
E)  deadweight loss from the price

Question 16

Consumer surplus exists when

Accepted Answer

A)  it costs less to produce goods than buyers must pay for them. 
B)  consumers value the good more highly than what they must pay to buy it. 
C)  taxes on goods are less than the appropriate amount. 
D)  the marginal benefit of the good is always equal to or less than the price of the good. 
E)  the price of the good is greater than the marginal cost of producing a unit of the good. 
A)  it costs less to produce goods than buyers must pay for them. 
B)  consumers value the good more highly than what they must pay to buy it. 
C)  taxes on goods are less than the appropriate amount. 
D)  the marginal benefit of the good is always equal to or less than the price of the good. 
E)  the price of the good is greater than the marginal cost of producing a unit of the good.

Question 17

-In the above figure,the market is at its equilibrium.Area A + area B is equal to

Accepted Answer

A)  consumer surplus. 
B)  total revenue. 
C)  total surplus. 
D)  marginal benefit. 
E)  producer surplus. 
A)  consumer surplus. 
B)  total revenue. 
C)  total surplus. 
D)  marginal benefit. 
E)  producer surplus.

Question 18

In general,as the consumption of a good or service increases,the marginal benefit from consuming that good or service

Accepted Answer

A)  increases. 
B)  decreases. 
C)  stays the same. 
D)  at first increases and then decreases. 
E)  at first decreases and then increases. 
A)  increases. 
B)  decreases. 
C)  stays the same. 
D)  at first increases and then decreases. 
E)  at first decreases and then increases.

Question 19

When allocative efficiency occurs,

Accepted Answer

A)  an economy produces the goods and services most highly valued. 
B)  marginal benefit exceeds marginal cost by some amount. 
C)  technology must be increasing. 
D)  we can simultaneously produce more of all goods. 
E)  marginal benefit exceeds marginal cost by as much as possible. 
A)  an economy produces the goods and services most highly valued. 
B)  marginal benefit exceeds marginal cost by some amount. 
C)  technology must be increasing. 
D)  we can simultaneously produce more of all goods. 
E)  marginal benefit exceeds marginal cost by as much as possible.

Question 20

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above,the cost of producing 10,000 pizzas a day is

Accepted Answer

A)  $60,000. 
B)  $100,000. 
C)  $40,000. 
D)  $80,000. 
E)  $50,000. 
A)  $60,000. 
B)  $100,000. 
C)  $40,000. 
D)  $80,000. 
E)  $50,000.

-In the above figure,if the quantity is equal to 1,500,000 units,the deadweight is equal to

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

Which of the following is true? i.Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service. ii.Producer surplus equals marginal benefit minus price,summed over the quantity produced. iii.A supply curve is a marginal cost curve.

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total producer surplus equals

Why is a competitive market efficient?

To achieve ,marginal cost marginal benefit.

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

6.7 Integrative Questions -The figure above shows the market for brooms.If 400 brooms are produced,

The marginal benefit of each additional unit of a good consumed

The concept of "the invisible hand" suggests that

Allocative efficiency is achieved when the marginal benefit of a good

A quantity less than the equilibrium quantity in a competitive market is inefficient because

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

The supply curve of a good or service is the same as

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Consumer surplus exists when

-In the above figure,the market is at its equilibrium.Area A + area B is equal to

In general,as the consumption of a good or service increases,the marginal benefit from consuming that good or service

When allocative efficiency occurs,

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the cost of producing 10,000 pizzas a day is

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 6: Efficiency and Fairness of Markets

-In the above figure,if the quantity is equal to 1,500,000 units,the deadweight is equal to

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

Which of the following is true? i.Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service. ii.Producer surplus equals marginal benefit minus price,summed over the quantity produced. iii.A supply curve is a marginal cost curve.

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total producer surplus equals

Why is a competitive market efficient?

To achieve ________,marginal cost ________ marginal benefit.

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

6.7 Integrative Questions -The figure above shows the market for brooms.If 400 brooms are produced,

The marginal benefit of each additional unit of a good consumed

The concept of "the invisible hand" suggests that

Allocative efficiency is achieved when the marginal benefit of a good

A quantity less than the equilibrium quantity in a competitive market is inefficient because

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

The supply curve of a good or service is the same as

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Consumer surplus exists when

-In the above figure,the market is at its equilibrium.Area A + area B is equal to

In general,as the consumption of a good or service increases,the marginal benefit from consuming that good or service

When allocative efficiency occurs,

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the cost of producing 10,000 pizzas a day is

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

To achieve ,marginal cost marginal benefit.