Question 1

All points on the production possibilities frontier

Accepted Answer

A) are production inefficient. 
B) achieve allocative efficiency. 
C) are production efficient but only one point achieves allocative efficiency. 
D) are allocatively efficient but only one point achieves production efficiency. 
E) are allocatively inefficient. 
A) are production inefficient. 
B) achieve allocative efficiency. 
C) are production efficient but only one point achieves allocative efficiency. 
D) are allocatively efficient but only one point achieves production efficiency. 
E) are allocatively inefficient. C

Question 2

The price of a cowboy hat is $100.Willie is willing to pay $130, Waylon is willing to pay $100, and Merle is willing to pay $85.All of the following statements are true EXCEPT:

Accepted Answer

A) Merle's consumer surplus is $15. 
B) The sum of consumer surplus will be $30. 
C) Waylon's consumer surplus is $0. 
D) Only Willie and Waylon will purchase the cowboy hat. 
E) Willie's consumer surplus is $30. 
A) Merle's consumer surplus is $15. 
B) The sum of consumer surplus will be $30. 
C) Waylon's consumer surplus is $0. 
D) Only Willie and Waylon will purchase the cowboy hat. 
E) Willie's consumer surplus is $30. A

Question 3

-The figure above shows the market for brooms.If the market is efficient,

Accepted Answer

A) 0 brooms are produced. 
B) 600 brooms are produced. 
C) more than 1000 brooms are produced. 
D) between 0 and 600 brooms are produced. 
E) between 600 and 1000 brooms are produced. 
A) 0 brooms are produced. 
B) 600 brooms are produced. 
C) more than 1000 brooms are produced. 
D) between 0 and 600 brooms are produced. 
E) between 600 and 1000 brooms are produced. B

Question 4

In a figure, the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

Accepted Answer

A) above; demand; above 
B) below; supply; below 
C) below; demand; below 
D) below; demand; above 
E) above; supply; below 
A) above; demand; above 
B) below; supply; below 
C) below; demand; below 
D) below; demand; above 
E) above; supply; below

Question 5

When economists refer to "the invisible hand," what do they mean?

Accepted Answer

In his book, Wealth of Nations, Adam Smi

Question 6

-The figure above shows the market for pants.If the efficient quantity is produced,

Accepted Answer

A) there will be no consumer surplus. 
B) the sum of consumer and producer surplus will be maximized. 
C) a small deadweight loss will result. 
D) the sum of consumer and producer surplus will be minimized. 
E) the consumer surplus on all the pants must equal the producer surplus on all the pants. 
A) there will be no consumer surplus. 
B) the sum of consumer and producer surplus will be maximized. 
C) a small deadweight loss will result. 
D) the sum of consumer and producer surplus will be minimized. 
E) the consumer surplus on all the pants must equal the producer surplus on all the pants.

Question 7

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 8

Suppose you're willing to tutor a student for $10 an hour.The student pays you $15 an hour.What is your producer surplus?

Accepted Answer

A) $5 an hour 
B) $10 an hour 
C) $15 an hour 
D) $25 an hour 
E) More than $25 an hour 
A) $5 an hour 
B) $10 an hour 
C) $15 an hour 
D) $25 an hour 
E) More than $25 an hour

Question 9

Marginal benefit equals the

Accepted Answer

A) benefit that a person receives from consuming another unit of a good. 
B) additional efficiency from producing another unit of a good. 
C) increase in profit from producing another unit of a good. 
D) cost of producing another unit of a good. 
E) total benefit from consuming all the units of the good or service. 
A) benefit that a person receives from consuming another unit of a good. 
B) additional efficiency from producing another unit of a good. 
C) increase in profit from producing another unit of a good. 
D) cost of producing another unit of a good. 
E) total benefit from consuming all the units of the good or service.

Question 10

As more of a good is consumed, the marginal benefit of the good

Accepted Answer

A) increases. 
B) decreases. 
C) remains constant. 
D) is unpredictable. 
E) first decreases and then increases. 
A) increases. 
B) decreases. 
C) remains constant. 
D) is unpredictable. 
E) first decreases and then increases.

Question 11

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is __________, and the method of allocation for determining the winner of the race is __________.

Accepted Answer

A) lottery; contest 
B) contest; lottery 
C) first-come, first-served; lottery 
D) lottery; first-come, first-served 
E) contest; command 
A) lottery; contest 
B) contest; lottery 
C) first-come, first-served; lottery 
D) lottery; first-come, first-served 
E) contest; command

Question 12

If you split your dessert with your date, you are using a ________ allocation method.

Accepted Answer

A) first-come, first-served 
B) sharing equally 
C) contest 
D) personal characteristics 
E) command 
A) first-come, first-served 
B) sharing equally 
C) contest 
D) personal characteristics 
E) command

Question 13

When a market is efficient, the

Accepted Answer

A) sum of consumer surplus and producer surplus is maximized. 
B) deadweight gain is maximized. 
C) quantity produced is maximized. 
D) marginal benefit of the last unit produced exceeds the marginal cost by as much as possible. 
E) total benefit equals the total cost. 
A) sum of consumer surplus and producer surplus is maximized. 
B) deadweight gain is maximized. 
C) quantity produced is maximized. 
D) marginal benefit of the last unit produced exceeds the marginal cost by as much as possible. 
E) total benefit equals the total cost.

Question 14

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 ar

Question 15

In 2009, tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

Accepted Answer

A) lottery 
B) majority rule 
C) contest 
D) first-come, first-served 
E) personal characteristics 
A) lottery 
B) majority rule 
C) contest 
D) first-come, first-served 
E) personal characteristics

Question 16

Consumer surplus is equal to

Accepted Answer

A) marginal benefit minus price summed over the quantity consumed. 
B) price minus marginal benefit summed over the quantity consumed. 
C) marginal benefit summed over the quantity consumed. 
D) price multiplied by the quantity consumed. 
E) marginal benefit plus price summed over the quantity consumed. 
A) marginal benefit minus price summed over the quantity consumed. 
B) price minus marginal benefit summed over the quantity consumed. 
C) marginal benefit summed over the quantity consumed. 
D) price multiplied by the quantity consumed. 
E) marginal benefit plus price summed over the quantity consumed.

Question 17

Maria helps tutor students taking economics.The equilibrium price for tutoring is $15 per hour.Maria has determined her opportunity cost per hour to be $6 for the first, $9 for the second, $12 for the third, $15 for the fourth, and $18 for the fifth.How many hours will Maria tutor? Why this amount of hours? What, if any, is Maria's producer surplus?

Accepted Answer

Maria will tutor for 4 hours.For all of

Question 18

-In the figure above, suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

Accepted Answer

A) A 
B) B 
C) A + B 
D) B - A 
E) B ÷ A 
A) A 
B) B 
C) A + B 
D) B - A 
E) B ÷ A

Question 19

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

Accepted Answer

A) $0.00. 
B) $0.50. 
C) $1.00. 
D) more than $1.00. 
E) None of the above answers is correct. 
A) $0.00. 
B) $0.50. 
C) $1.00. 
D) more than $1.00. 
E) None of the above answers is correct.

Question 20

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from all 15 sodas is

Accepted Answer

A) $15.00. 
B) $22.50. 
C) $11.25. 
D) $8.00. 
E) $1.50. 
A) $15.00. 
B) $22.50. 
C) $11.25. 
D) $8.00. 
E) $1.50.

All points on the production possibilities frontier

The price of a cowboy hat is $100.Willie is willing to pay $130, Waylon is willing to pay $100, and Merle is willing to pay $85.All of the following statements are true EXCEPT:

-The figure above shows the market for brooms.If the market is efficient,

In a figure, the consumer surplus is equal to the area the curve and the price.

When economists refer to "the invisible hand," what do they mean?

-The figure above shows the market for pants.If the efficient quantity is produced,

To achieve , marginal cost marginal benefit.

Suppose you're willing to tutor a student for $10 an hour.The student pays you $15 an hour.What is your producer surplus?

Marginal benefit equals the

As more of a good is consumed, the marginal benefit of the good

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is , and the method of allocation for determining the winner of the race is .

If you split your dessert with your date, you are using a ________ allocation method.

When a market is efficient, the

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

In 2009, tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

Consumer surplus is equal to

-In the figure above, suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from all 15 sodas is

Getting Started

The Usand 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

All points on the production possibilities frontier

The price of a cowboy hat is $100.Willie is willing to pay $130, Waylon is willing to pay $100, and Merle is willing to pay $85.All of the following statements are true EXCEPT:

-The figure above shows the market for brooms.If the market is efficient,

In a figure, the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

When economists refer to "the invisible hand," what do they mean?

-The figure above shows the market for pants.If the efficient quantity is produced,

To achieve ________, marginal cost ________ marginal benefit.

Suppose you're willing to tutor a student for $10 an hour.The student pays you $15 an hour.What is your producer surplus?

Marginal benefit equals the

As more of a good is consumed, the marginal benefit of the good

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is __________, and the method of allocation for determining the winner of the race is __________.

If you split your dessert with your date, you are using a ________ allocation method.

When a market is efficient, the

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

In 2009, tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

Consumer surplus is equal to

-In the figure above, suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from all 15 sodas is

Getting Started

The Usand 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

In a figure, the consumer surplus is equal to the area the curve and the price.

To achieve , marginal cost marginal benefit.

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is , and the method of allocation for determining the winner of the race is .