Exam 4: Efficiency in Resource Allocation: How Much Do We Have How Much Do We Want

Use the following diagram to answer the following questions. -Refer to Diagram 4-1. The efficient level of compact discs is given by quantity:

Which of the following is NOT an example of government failure?

Use the following diagram to answer the following questions. -Refer to Wages. Employment loss from government imposing a minimum wage is given by:

In determining the efficient amount of a good or service, it is only required that the benefits provided by a good or service be equal to or greater than the costs of providing it.

Which of the following is NOT an example of market failure?

Government subsidized medical care results in inefficiently high levels of demand for medical care.

Use the following diagram to find the loss in net benefits associated with pollution.

The area under the demand curve represents the benefits producers receive when they sell some quantity of a product.

The benefit consumers receive when they consume an additional unit of a good is measured by:

If marginal social cost is greater than marginal social benefit, allocative efficiency can be improved by increasing production.

Government rent controls promote efficiency and equity.

A competitive industry usually produces the efficient level of output.

Use the following diagram to answer the following questions. -Refer to Diagram 4-3. In the above diagram the competitive level of output is:

Suppose that at current production levels, marginal social benefit is $75 while marginal cost is $80. We know that:

The total benefits derived from consumption is measured as the:

The monopolist will set the price at the level where its profits are maximized.

The cost to producers when they produce an additional unit of a good is measured by:

Use the following diagram to answer the following questions. -Refer to Diagram 4-2. In the above diagram the competitive level of output is:

Use the following diagram to answer the following questions. -Use the following diagram. The total net efficiency loss from government agricultural price supports is given by area:

Use the following diagram to answer the following questions. -Refer to Diagram 4-2. In the above diagram, counting the external benefits increases total costs by area: