Exam 7: Efficiency, Exchange, and the Invisible Hand in Action

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The statement, "If a deal is too good to be true, then it probably is not true," is most closely related to which core economic principle?

(Multiple Choice)

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Question 81

If the market supply curve does not capture all of the costs to society of producing an additional unit of good, then:

(Multiple Choice)

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Question 82

The role that prices play in directing resources away from overcrowded markets and towards markets that are underserved is known as the ________ function of price.

(Multiple Choice)

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Question 83

Suppose a market is in equilibrium. The area below the market price and above the supply curve is:

(Multiple Choice)

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Question 84

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. If the market supply curve is given by S1, then in the long run firms will:

(Multiple Choice)

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Question 85

If you were to start your own business, your implicit costs would include the:

(Multiple Choice)

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Question 86

Consider a perfectly competitive industry in a long-run equilibrium. If a single firm in that industry discovers a significant cost-saving production technology, then:

(Multiple Choice)

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Question 87

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. In the long run, there will be ________ firms in this market.

(Multiple Choice)

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Question 88

Suppose the market for coffee is in equilibrium at a price of $5 per pound. This means that:

(Multiple Choice)

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Question 89

The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves. Given that the current equilibrium price is $8, what will happen to the number of firms in this market in the long run?

(Multiple Choice)

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Question 90

The figure below shows the supply and demand curves for oranges in Smallville. At a price of $4 per pound there will be an excess of pounds of oranges per day.

(Multiple Choice)

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Question 91

If a firm is earning zero economic profit, then its accounting profit will:

(Multiple Choice)

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Question 92

Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below. If the government provides a subsidy of $500 per ton, then the cost of subsidy, which must be borne by taxpayers, will be ________ per day.

(Multiple Choice)

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Question 93

The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves. In the long run equilibrium in this market:

(Multiple Choice)

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Question 94

The fact that price subsidies reduce economic surplus implies that:

(Multiple Choice)

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Question 95

A cost-saving innovation in a perfectly competitive industry will lead to:

(Multiple Choice)

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Question 96

The figure below shows the supply and demand curves for oranges in Smallville. When this market is in equilibrium, total economic surplus is ________ per day.

(Multiple Choice)

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Question 97

In a free market economy, the decisions of buyers and sellers are:

(Multiple Choice)

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Question 98

Which of the following best describes how a perfectly competitive industry would respond to a sudden increase in popularity of the product? The market demand curve would shift to the right, leading to:

(Multiple Choice)

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Question 99

If an individual consumer is willing to pay $11 for one unit of a good but is able to purchase it for $7, then his or her consumer surplus from the purchase of that unit would be:

(Multiple Choice)

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Question 100

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Exam 7: Efficiency, Exchange, and the Invisible Hand in Action

The statement, "If a deal is too good to be true, then it probably is not true," is most closely related to which core economic principle?

If the market supply curve does not capture all of the costs to society of producing an additional unit of good, then:

The role that prices play in directing resources away from overcrowded markets and towards markets that are underserved is known as the ________ function of price.

Suppose a market is in equilibrium. The area below the market price and above the supply curve is:

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. If the market supply curve is given by S1, then in the long run firms will:

If you were to start your own business, your implicit costs would include the:

Consider a perfectly competitive industry in a long-run equilibrium. If a single firm in that industry discovers a significant cost-saving production technology, then:

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. In the long run, there will be ________ firms in this market.

Suppose the market for coffee is in equilibrium at a price of $5 per pound. This means that:

The figure below shows the supply and demand curves for oranges in Smallville. At a price of $4 per pound there will be an excess ________ of ________ pounds of oranges per day.

If a firm is earning zero economic profit, then its accounting profit will:

Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below. If the government provides a subsidy of $500 per ton, then the cost of subsidy, which must be borne by taxpayers, will be ________ per day.

The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves. In the long run equilibrium in this market:

The fact that price subsidies reduce economic surplus implies that:

A cost-saving innovation in a perfectly competitive industry will lead to:

The figure below shows the supply and demand curves for oranges in Smallville. When this market is in equilibrium, total economic surplus is ________ per day.

In a free market economy, the decisions of buyers and sellers are:

Which of the following best describes how a perfectly competitive industry would respond to a sudden increase in popularity of the product? The market demand curve would shift to the right, leading to:

If an individual consumer is willing to pay $11 for one unit of a good but is able to purchase it for $7, then his or her consumer surplus from the purchase of that unit would be:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

The figure below shows the supply and demand curves for oranges in Smallville. At a price of $4 per pound there will be an excess of pounds of oranges per day.