Question 1

Suppose a tax is imposed on a good. This will

Accepted Answer

A)  increase the price paid by the buyer and decrease the price received by the seller. 
B)  increase the price paid by the buyer but leave the price received by the seller unchanged. 
C)  decrease the price received by the seller but leave the price received by the buyer unchanged. 
D)  increase the price received by the seller and decrease the price paid by the buyer. 
A)  increase the price paid by the buyer and decrease the price received by the seller. 
B)  increase the price paid by the buyer but leave the price received by the seller unchanged. 
C)  decrease the price received by the seller but leave the price received by the buyer unchanged. 
D)  increase the price received by the seller and decrease the price paid by the buyer.

Question 2

-The diagram above depicts the market demand for, and market price of, buckets of raw oysters in Orlando.
a) What is the consumer surplus of the person who buys the 100th bucket of oysters?
b) What is the consumer surplus of the person who buys the 200th bucket of oysters?
c) What is the consumer surplus of the person who buys the 300th bucket of oysters?
d) What is the consumer surplus in the market?

Accepted Answer

a) The consumer surplus of the person wh

Question 3

Consumer surplus is the

Accepted Answer

A)  value of a good expressed in dollars. 
B)  price of a good expressed in dollars. 
C)  value of a good minus the price paid for it summed over the quantity bought. 
D)  value of a good plus the price paid for it summed over the quantity bought. 
A)  value of a good expressed in dollars. 
B)  price of a good expressed in dollars. 
C)  value of a good minus the price paid for it summed over the quantity bought. 
D)  value of a good plus the price paid for it summed over the quantity bought.

Question 4

-What is the efficient quantity of snowboards in the above figure?

Accepted Answer

A)  0 
B)  100 
C)  200 
D)  500 
A)  0 
B)  100 
C)  200 
D)  500

Question 5

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. How many cups of coffee per day will Jane buy?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  None 
A)  1 
B)  2 
C)  3 
D)  None

Question 6

Producer surplus is the difference between the

Accepted Answer

A)  price and the willingness to pay for the good. 
B)  price and the marginal cost of producing the good summed over the quantity sold. 
C)  willingness to pay for the good and the marginal cost of producing the good summed over the quantity sold. 
D)  marginal benefit of consuming the good and the marginal cost of producing the good summed over the quantity sold. 
A)  price and the willingness to pay for the good. 
B)  price and the marginal cost of producing the good summed over the quantity sold. 
C)  willingness to pay for the good and the marginal cost of producing the good summed over the quantity sold. 
D)  marginal benefit of consuming the good and the marginal cost of producing the good summed over the quantity sold.

Question 7

Producer surplus is the

Accepted Answer

A)  cost of the good summed over the quantity sold. 
B)  demand for a good minus the supply summed over the quantity sold. 
C)  price of a good minus the marginal cost of producing it summed over the quantity sold. 
D)  marginal cost of producing it summed over the quantity sold. 
A)  cost of the good summed over the quantity sold. 
B)  demand for a good minus the supply summed over the quantity sold. 
C)  price of a good minus the marginal cost of producing it summed over the quantity sold. 
D)  marginal cost of producing it summed over the quantity sold.

Question 8

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. At the efficient quantity, the minimum supply-price of a DVD is ________ and the value of a DVD is ________.

Accepted Answer

A)  $16; $24 
B)  $16; $20 
C)  $20; $16 
D)  $20; $20 
A)  $16; $24 
B)  $16; $20 
C)  $20; $16 
D)  $20; $20

Question 9

-The figure above shows the market for milk. When the efficient quantity of milk is produced, the marginal social cost of the last gallon is

Accepted Answer

A)  $3.50. 
B)  $3.00. 
C)  $2.50. 
D)  $2.00. 
A)  $3.50. 
B)  $3.00. 
C)  $2.50. 
D)  $2.00.

Question 10

What is the relationship between the marginal social benefit of milk and marginal social cost of milk when the efficient quantity of milk is produced?

Accepted Answer

The marginal social

Question 11

-The figure above shows the market for pizza.
a) If the price of a slice of pizza is $3, what is the consumer surplus of the 50th slice?
b) If the price of a slice of pizza is $3, what is the producer surplus of the 50th slice?
c) What is the efficient quantity? What is the equilibrium quantity? What is the deadweight loss when the equilibrium quantity is produced?

Accepted Answer

a) Consumer surplus is the distance betw

Question 12

As long as production is such that marginal social benefit is greater than marginal social cost, an efficient outcome occurs.

Accepted Answer

A) True 
 B)False

Question 13

Fitness is a magazine for women about health and exercise. Fitness offers year subscriptions for $12 on their website. Jess, Ania, Mandy, and Chloe exercise together and each enjoy reading Fitness. Jess is willing to pay $10, Ania is willing to pay $16, Mandy is willing to pay $24, and Chloe is willing to pay $12 for a subscription to the magazine. Who will subscribe to the magazine?

Accepted Answer

A)  Ania, Mandy, and Chloe 
B)  Jess, Ania, Mandy, and Chloe 
C)  Jess, Ania, and Chloe 
D)  Mandy and Chloe 
A)  Ania, Mandy, and Chloe 
B)  Jess, Ania, Mandy, and Chloe 
C)  Jess, Ania, and Chloe 
D)  Mandy and Chloe

Question 14

As a method of resource allocation, force

Accepted Answer

A)  is not important. 
B)  plays a crucial negative role. 
C)  plays a crucial positive role. 
D)  plays a crucial role for both good and ill. 
A)  is not important. 
B)  plays a crucial negative role. 
C)  plays a crucial positive role. 
D)  plays a crucial role for both good and ill.

Question 15

-The figure above shows Clara's demand for CDs. If the price for a CD is $15, then Clara

Accepted Answer

A)  receives no consumer surplus on the 6th CD she buys. 
B)  receives a total of $10 of consumer surplus. 
C)  will buy no CDs. 
D)  receives a total of $40 of consumer surplus. 
A)  receives no consumer surplus on the 6th CD she buys. 
B)  receives a total of $10 of consumer surplus. 
C)  will buy no CDs. 
D)  receives a total of $40 of consumer surplus.

Question 16

-The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day

Accepted Answer

A)  the deadweight loss is $100. 
B)  the deadweight loss is $75. 
C)  the deadweight loss is $50. 
D)  there is no deadweight loss. 
A)  the deadweight loss is $100. 
B)  the deadweight loss is $75. 
C)  the deadweight loss is $50. 
D)  there is no deadweight loss.

Question 17

-The table above gives the demand and supply schedules for bread. Assume that the only people who benefit from bread are the people who consume it and the only people who bear the cost of bread are the people who produce it.
a) What is the maximum price that consumers are willing to pay for the 80th loaf of bread?
b) What is the minimum price that producers are willing to accept to produce 200 loaves of bread?
c) What is the efficient quantity of bread?
d) If the market is efficient, what is the consumer surplus?
e) If the market is efficient, what is the producer surplus?
f) If one firm owns all the bread outlets and sells 120 loaves per day, what is the deadweight loss (if any)?

Accepted Answer

a) The demand curve shows consumers' wil

Question 18

The marginal cost curve

Accepted Answer

A)  shows the maximum price that a producer must receive to induce it to produce a unit of a good or service. 
B)  shows the minimum price sellers must receive to produce a unit of a good or service. 
C)  is the same as the demand curve. 
D)  shows what buyers are willing to give up to get one more unit of a good or service. 
A)  shows the maximum price that a producer must receive to induce it to produce a unit of a good or service. 
B)  shows the minimum price sellers must receive to produce a unit of a good or service. 
C)  is the same as the demand curve. 
D)  shows what buyers are willing to give up to get one more unit of a good or service.

Question 19

-Based on the above table, which of the following is the efficient quantity of output?

Accepted Answer

A)  31 
B)  16 
C)  32 
D)  None of the above answers is correct. 
A)  31 
B)  16 
C)  32 
D)  None of the above answers is correct.

Question 20

-The figure above shows the market for umbrellas in Sunville. What is the marginal social benefit that Sunville consumers receive from the 200th umbrella bought?

Accepted Answer

A)  $23.33 
B)  $30.00 
C)  $26.67 
D)  $50.00 
A)  $23.33 
B)  $30.00 
C)  $26.67 
D)  $50.00

Suppose a tax is imposed on a good. This will

Consumer surplus is the

-What is the efficient quantity of snowboards in the above figure?

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. How many cups of coffee per day will Jane buy?

Producer surplus is the difference between the

Producer surplus is the

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. At the efficient quantity, the minimum supply-price of a DVD is and the value of a DVD is .

-The figure above shows the market for milk. When the efficient quantity of milk is produced, the marginal social cost of the last gallon is

What is the relationship between the marginal social benefit of milk and marginal social cost of milk when the efficient quantity of milk is produced?

As long as production is such that marginal social benefit is greater than marginal social cost, an efficient outcome occurs.

As a method of resource allocation, force

-The figure above shows Clara's demand for CDs. If the price for a CD is $15, then Clara

-The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day

The marginal cost curve

-Based on the above table, which of the following is the efficient quantity of output?

-The figure above shows the market for umbrellas in Sunville. What is the marginal social benefit that Sunville consumers receive from the 200th umbrella bought?

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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 5: Efficiency and Equity

Suppose a tax is imposed on a good. This will

Consumer surplus is the

-What is the efficient quantity of snowboards in the above figure?

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. How many cups of coffee per day will Jane buy?

Producer surplus is the difference between the

Producer surplus is the

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. At the efficient quantity, the minimum supply-price of a DVD is ________ and the value of a DVD is ________.

-The figure above shows the market for milk. When the efficient quantity of milk is produced, the marginal social cost of the last gallon is

What is the relationship between the marginal social benefit of milk and marginal social cost of milk when the efficient quantity of milk is produced?

As long as production is such that marginal social benefit is greater than marginal social cost, an efficient outcome occurs.

As a method of resource allocation, force

-The figure above shows Clara's demand for CDs. If the price for a CD is $15, then Clara

-The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day

The marginal cost curve

-Based on the above table, which of the following is the efficient quantity of output?

-The figure above shows the market for umbrellas in Sunville. What is the marginal social benefit that Sunville consumers receive from the 200th umbrella bought?

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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. At the efficient quantity, the minimum supply-price of a DVD is and the value of a DVD is .