Question 1

Use the figure below to answer the following questions.
   
Figure 5.3.1
-Refer to Figure 5.3.1.The efficient quantity is

Accepted Answer

A) 250 units. 
B) 200 units. 
C) 150 units. 
D) 100 units. 
E) 50 units. 
A) 250 units. 
B) 200 units. 
C) 150 units. 
D) 100 units. 
E) 50 units.

Question 2

Use the table below to answer the following questions.
Table 5.2.1
  
-Refer to Table 5.2.1.If the price is $6 a unit, the producer surplus on the third unit is

Accepted Answer

A) $3. 
B) $6. 
C) $5. 
D) $4. 
E) $2. 
A) $3. 
B) $6. 
C) $5. 
D) $4. 
E) $2.

Question 3

The winner of the men's or women's tennis singles at the Canadian Open is paid twice as much as the runner-up, but it takes two players to have a singles final.This compensation arrangement is

Accepted Answer

A) always unfair. 
B) fair by the results view because the players make a salary that is higher than the average Canadian and fair by the rules view because the players agree to abide by the rules of tennis. 
C) fair by the results view because the prize money is not equally distributed, and fair by the rules view because the players voluntarily enter the tournament. 
D) always fair. 
E) fair by the rules view because the prize money is not equally distributed, and fair by the results view because the players voluntarily enter the tournament. 
A) always unfair. 
B) fair by the results view because the players make a salary that is higher than the average Canadian and fair by the rules view because the players agree to abide by the rules of tennis. 
C) fair by the results view because the prize money is not equally distributed, and fair by the rules view because the players voluntarily enter the tournament. 
D) always fair. 
E) fair by the rules view because the prize money is not equally distributed, and fair by the results view because the players voluntarily enter the tournament.

Question 4

Use the information below to answer the following questions.
Fact 5.3.1
Only 1 percent of the world supply of water is fit for human consumption. Some places have more water than they can use; some could use much more than they have. The 1 percent available would be sufficient if only it were in the right place.
-Refer to Fact 5.3.1.The major problem in achieving an efficient use of the world's water is

Accepted Answer

A) the lack of rain in some areas of the world. 
B) water is vital for life. 
C) to get it from the places where it is most abundant to the places in which it has the most valuable uses. 
D) markets in water are controlled by governments or private producers. 
E) the price of water is too low. 
A) the lack of rain in some areas of the world. 
B) water is vital for life. 
C) to get it from the places where it is most abundant to the places in which it has the most valuable uses. 
D) markets in water are controlled by governments or private producers. 
E) the price of water is too low.

Question 5

Use the figure below to answer the following questions.
   
Figure 5.3.1
-Refer to Figure 5.3.1.At the efficient quantity, the price is

Accepted Answer

A) $20 a unit. 
B) $15 a unit. 
C) $10 a unit. 
D) $5 a unit. 
E) zero. 
A) $20 a unit. 
B) $15 a unit. 
C) $10 a unit. 
D) $5 a unit. 
E) zero.

Question 6

Suppose that the Hot Dog House can produce hotdogs at a constant cost of $0.25 each.If the Hot Dog House sells hotdogs for $0.50 each, then the Hot Dog House

Accepted Answer

A) receives a producer surplus. 
B) will raise the price of hot dogs. 
C) will allow consumers to receive a consumer surplus. 
D) has no producer surplus. 
E) has an opportunity cost of $0.50 a hot dog. 
A) receives a producer surplus. 
B) will raise the price of hot dogs. 
C) will allow consumers to receive a consumer surplus. 
D) has no producer surplus. 
E) has an opportunity cost of $0.50 a hot dog.

Question 7

Use the figure below to answer the following questions.
   
Figure 5.2.2
-Refer to Figure 5.2.2.If the price rises from P₀ to P₁, the change in consumer surplus is

Accepted Answer

A) A. 
B) B plus C. 
C) D plus E. 
D) A plus B plus C. 
E) A plus B plus C plus D plus E. 
A) A. 
B) B plus C. 
C) D plus E. 
D) A plus B plus C. 
E) A plus B plus C plus D plus E.

Question 8

A supply curve is

Accepted Answer

A) the same as a production possibilities frontier. 
B) a marginal social benefit curve. 
C) a marginal benefit curve. 
D) a marginal cost curve. 
E) a downward-sloping curve. 
A) the same as a production possibilities frontier. 
B) a marginal social benefit curve. 
C) a marginal benefit curve. 
D) a marginal cost curve. 
E) a downward-sloping curve.

Question 9

When 2,000 hamburgers a day are produced, the marginal social benefit from the 2000ᵗʰ hamburger is $1.50 and its marginal social cost is $1.00.And when 7,500 hamburgers a day are produced, the marginal social benefit from the 2000ᵗʰ hamburger is $1.00 and its marginal social cost is $1.50.The efficient quantity of hamburgers is ________ a day

Accepted Answer

A) less than 2,000 
B) between 2,000 and 7,500 
C) more than 7,500 
D) zero 
E) 2,000 
A) less than 2,000 
B) between 2,000 and 7,500 
C) more than 7,500 
D) zero 
E) 2,000

Question 10

Deadweight loss is

Accepted Answer

A) borne entirely by consumers. 
B) gained by producers. 
C) the social loss from inefficiency. 
D) not a problem with overproduction. 
E) eliminated by a monopoly. 
A) borne entirely by consumers. 
B) gained by producers. 
C) the social loss from inefficiency. 
D) not a problem with overproduction. 
E) eliminated by a monopoly.

Question 11

The two big approaches to thinking about fairness are

Accepted Answer

A) it's not fair if my income is less than yours and it's not fair if my opportunities in life are less than yours. 
B) it's not fair if the result isn't fair and it's not fair if the rules aren't fair. 
C) the fairness of democracy and the fairness of central planning. 
D) the fairness of income equality and the fairness of educational equality. 
E) it's not fair if you are treated unkindly and it's not fair if you treat someone unkindly. 
A) it's not fair if my income is less than yours and it's not fair if my opportunities in life are less than yours. 
B) it's not fair if the result isn't fair and it's not fair if the rules aren't fair. 
C) the fairness of democracy and the fairness of central planning. 
D) the fairness of income equality and the fairness of educational equality. 
E) it's not fair if you are treated unkindly and it's not fair if you treat someone unkindly.

Question 12

A new car has a sticker price of $35,000.Fred decided that he would pay no more than $32,000 for this car.He bought the car for $31,000.Fred obtained a consumer surplus of

Accepted Answer

A) $35,000. 
B) $32,000. 
C) $4,000. 
D) $3,000. 
E) $1,000. 
A) $35,000. 
B) $32,000. 
C) $4,000. 
D) $3,000. 
E) $1,000.

Question 13

Suppose the market for diamonds is a monopoly.We can expect

Accepted Answer

A) underproduction of diamonds. 
B) overproduction of diamonds. 
C) marginal social benefit to equal marginal social cost in the diamond market. 
D) an efficient quantity of diamonds. 
E) the allocation of diamonds to be first-come, first-served. 
A) underproduction of diamonds. 
B) overproduction of diamonds. 
C) marginal social benefit to equal marginal social cost in the diamond market. 
D) an efficient quantity of diamonds. 
E) the allocation of diamonds to be first-come, first-served.

Question 14

Use the figure below to answer the following questions.
   
Figure 5.3.2
-Refer to Figure 5.3.2.If the level of output is 100 units, the deadweight loss is area

Accepted Answer

A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG. 
A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG.

Question 15

Table 5.2.3
   
If the firm sells the first movie at a price of $7, what is the producer surplus on that movie?
-The marginal cost for Morgan's Marvellous Movies is given in the following table:

Accepted Answer

A) $28 
B) $3 
C) $7 
D) $6 
E) $1 
A) $28 
B) $3 
C) $7 
D) $6 
E) $1

Question 16

The marginal cost of producing an additional basket of tomatoes is $5.00.The consumer is willing to pay a maximum of $9.00 for an additional basket.A farmer sells a basket of tomatoes for $6.00 each.The farmer receives a producer surplus from selling an additional basket of tomatoes equal to

Accepted Answer

A) $1.00. 
B) $3.00. 
C) $4.00. 
D) $5.00. 
E) $9.00. 
A) $1.00. 
B) $3.00. 
C) $4.00. 
D) $5.00. 
E) $9.00.

Question 17

According to John Rawls' modified utilitarianism, income should be redistributed until

Accepted Answer

A) incomes are equal. 
B) opportunities are equal. 
C) the poorest person is as well off as possible. 
D) the poorest person is as well off as possible, after incorporating the costs of income transfers. 
E) the big tradeoff is eliminated. 
A) incomes are equal. 
B) opportunities are equal. 
C) the poorest person is as well off as possible. 
D) the poorest person is as well off as possible, after incorporating the costs of income transfers. 
E) the big tradeoff is eliminated.

Question 18

Use the table below to answer the following questions.
Table 5.2.1
  
-Table 5.2.1 gives information on marginal cost for the XYZ firm.If XYZ sells the first unit at a price of $6, what is the producer surplus on that unit?

Accepted Answer

A) $4 
B) $6 
C) $9 
D) $12 
E) $7 
A) $4 
B) $6 
C) $9 
D) $12 
E) $7

Question 19

At the Stratford Festival Theatre no reservations are accepted on the day of the performance; at matinees, reservations are accepted; at opening night performances reservations are essential.On the day of the performance, Stratford Festival Theatre allocates seats by ________; at matinees, it allocates seats by ________; at opening night performances, it allocates seats by ________.

Accepted Answer

A) first-come, first served; a command system; a combination of first-come, first-served and a command system 
B) force; first-come, first-served; a command system 
C) personal characteristics; personal characteristics; personal characteristics 
D) a lottery; first-come, first-served; personal characteristics 
E) first-come, first served; first-come, first-served; first-come, first-served 
A) first-come, first served; a command system; a combination of first-come, first-served and a command system 
B) force; first-come, first-served; a command system 
C) personal characteristics; personal characteristics; personal characteristics 
D) a lottery; first-come, first-served; personal characteristics 
E) first-come, first served; first-come, first-served; first-come, first-served

Question 20

Which of the following is true?

Accepted Answer

A) When resources are allocated on the basis of personal characteristics, all people who are willing and able to pay the price get the resource. 
B) When the range of activities to be monitored is large and complex, a command system allocates resources better than a market price. 
C) When a market price allocates resources, some people who are willing and able to pay that price don't get the resource. 
D) Force provides the state with an effective method of transferring wealth from the rich to the poor. 
E) When resources are allocated by force, people with the "right" characteristics get the resources. 
A) When resources are allocated on the basis of personal characteristics, all people who are willing and able to pay the price get the resource. 
B) When the range of activities to be monitored is large and complex, a command system allocates resources better than a market price. 
C) When a market price allocates resources, some people who are willing and able to pay that price don't get the resource. 
D) Force provides the state with an effective method of transferring wealth from the rich to the poor. 
E) When resources are allocated by force, people with the "right" characteristics get the resources.

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.The efficient quantity is

Use the table below to answer the following questions. Table 5.2.1 -Refer to Table 5.2.1.If the price is $6 a unit, the producer surplus on the third unit is

The winner of the men's or women's tennis singles at the Canadian Open is paid twice as much as the runner-up, but it takes two players to have a singles final.This compensation arrangement is

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.At the efficient quantity, the price is

Suppose that the Hot Dog House can produce hotdogs at a constant cost of $0.25 each.If the Hot Dog House sells hotdogs for $0.50 each, then the Hot Dog House

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2.If the price rises from P₀ to P₁, the change in consumer surplus is

A supply curve is

Deadweight loss is

The two big approaches to thinking about fairness are

A new car has a sticker price of $35,000.Fred decided that he would pay no more than $32,000 for this car.He bought the car for $31,000.Fred obtained a consumer surplus of

Suppose the market for diamonds is a monopoly.We can expect

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 100 units, the deadweight loss is area

Table 5.2.3 If the firm sells the first movie at a price of $7, what is the producer surplus on that movie? -The marginal cost for Morgan's Marvellous Movies is given in the following table:

The marginal cost of producing an additional basket of tomatoes is $5.00.The consumer is willing to pay a maximum of $9.00 for an additional basket.A farmer sells a basket of tomatoes for $6.00 each.The farmer receives a producer surplus from selling an additional basket of tomatoes equal to

According to John Rawls' modified utilitarianism, income should be redistributed until

Use the table below to answer the following questions. Table 5.2.1 -Table 5.2.1 gives information on marginal cost for the XYZ firm.If XYZ sells the first unit at a price of $6, what is the producer surplus on that unit?

Which of the following is true?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 5: Efficiency and Equity

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.The efficient quantity is

Use the table below to answer the following questions. Table 5.2.1 -Refer to Table 5.2.1.If the price is $6 a unit, the producer surplus on the third unit is

The winner of the men's or women's tennis singles at the Canadian Open is paid twice as much as the runner-up, but it takes two players to have a singles final.This compensation arrangement is

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.At the efficient quantity, the price is

Suppose that the Hot Dog House can produce hotdogs at a constant cost of $0.25 each.If the Hot Dog House sells hotdogs for $0.50 each, then the Hot Dog House

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2.If the price rises from P₀ to P₁, the change in consumer surplus is

A supply curve is

Deadweight loss is

The two big approaches to thinking about fairness are

A new car has a sticker price of $35,000.Fred decided that he would pay no more than $32,000 for this car.He bought the car for $31,000.Fred obtained a consumer surplus of

Suppose the market for diamonds is a monopoly.We can expect

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 100 units, the deadweight loss is area

Table 5.2.3 If the firm sells the first movie at a price of $7, what is the producer surplus on that movie? -The marginal cost for Morgan's Marvellous Movies is given in the following table:

The marginal cost of producing an additional basket of tomatoes is $5.00.The consumer is willing to pay a maximum of $9.00 for an additional basket.A farmer sells a basket of tomatoes for $6.00 each.The farmer receives a producer surplus from selling an additional basket of tomatoes equal to

According to John Rawls' modified utilitarianism, income should be redistributed until

Use the table below to answer the following questions. Table 5.2.1 -Table 5.2.1 gives information on marginal cost for the XYZ firm.If XYZ sells the first unit at a price of $6, what is the producer surplus on that unit?

Which of the following is true?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters