Question 1

-In the above figure, if output is 30 units, then the total deadweight loss is

Accepted Answer

A)  $5. 
B)  $10. 
C)  $20. 
D)  $60. 
A)  $5. 
B)  $10. 
C)  $20. 
D)  $60.

Question 2

-Suppose consumers decide they value a product more highly than before. Then the efficient quantity to produce of that product ________.

Accepted Answer

A)  increases 
B)  does not change 
C)  decreases 
D)  perhaps changes, but without more information the direction of the change cannot be told 
A)  increases 
B)  does not change 
C)  decreases 
D)  perhaps changes, but without more information the direction of the change cannot be told

Question 3

Susan thinks the only fair outcome is one in which she has three slices of pizza a week. Susan is using a(n) ________ concept of fairness.

Accepted Answer

A)  "it's not fair if the result isn't fair" 
B)  "it's not fair if the rules aren't fair" 
C)  "big tradeoff" 
D)  "Novak principle" 
A)  "it's not fair if the result isn't fair" 
B)  "it's not fair if the rules aren't fair" 
C)  "big tradeoff" 
D)  "Novak principle"

Question 4

-The above table gives the market demand and market supply schedules for soda. There are no external benefits or external costs. What is the efficient quantity of soda?

Accepted Answer

A)  1400 
B)  1000 
C)  600 
D)  It is impossible to determine the efficient quantity without more information. 
A)  1400 
B)  1000 
C)  600 
D)  It is impossible to determine the efficient quantity without more information.

Question 5

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then the maximum that Dana is willing to pay for the 8th gallon of ice cream is

Accepted Answer

A)  $1. 
B)  $2. 
C)  $3. 
D)  $5. 
A)  $1. 
B)  $2. 
C)  $3. 
D)  $5.

Question 6

Alvin Roth of Harvard won the 2012 Nobel Prize in Economics for designing systems that allocate resources in innovative ways. For example, he designed a system that matches donated kidneys to recipients waiting for such donations. This system takes into account the needs of each perspective recipient, their blood type, and the urgency of their case. (Source: Washington Post, October 16, 2012) Based on the news clip above, the allocation of resources is made using

Accepted Answer

A)  market price. 
B)  auction. 
C)  lottery. 
D)  personal characteristics. 
A)  market price. 
B)  auction. 
C)  lottery. 
D)  personal characteristics.

Question 7

At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then

Accepted Answer

A)  production of table saws should be decreased to reach the efficient level. 
B)  production of table saws should be increased to reach the efficient level. 
C)  production of table saws is currently at the efficient level. 
D)  producer surplus will be larger than consumer surplus. 
A)  production of table saws should be decreased to reach the efficient level. 
B)  production of table saws should be increased to reach the efficient level. 
C)  production of table saws is currently at the efficient level. 
D)  producer surplus will be larger than consumer surplus.

Question 8

-In the above figure, the second ton of wheat would be produced even though the producer surplus on it is zero if the price per ton of wheat was

Accepted Answer

A)  $25. 
B)  $50. 
C)  $75. 
D)  $100. 
A)  $25. 
B)  $50. 
C)  $75. 
D)  $100.

Question 9

-The figure above shows the market for umbrellas in Sunville. Suppose one firm owns all umbrella stores in Sunville and charges $40 per umbrella. In this situation, the market for umbrellas is

Accepted Answer

A)  efficient, with no deadweight loss but also no surplus. 
B)  inefficient, with a deadweight loss of $2,666.67. 
C)  inefficient, with a deadweight loss of $1,333.33. 
D)  efficient, generating a total surplus of more than $10,000. 
A)  efficient, with no deadweight loss but also no surplus. 
B)  inefficient, with a deadweight loss of $2,666.67. 
C)  inefficient, with a deadweight loss of $1,333.33. 
D)  efficient, generating a total surplus of more than $10,000.

Question 10

"If the price of a ticket to Sea World exceeds the marginal cost of the ticket by $13, a producer surplus exists for Sea World." Is this statement true or false?

Accepted Answer

The statement is True. Anytime

Question 11

The night before enrollment was to open for the University of Johannesburg a line of people more than a mile long formed outside the gates. When the gates opened, a stampede started, and a woman lost her life in her attempt to secure her son a spot at the university and a chance for a better life. (Source: New York Times, January 10, 2012) Based on the news clip above, the allocation of resources in made using

Accepted Answer

A)  market price. 
B)  auction. 
C)  first-come, first-served. 
D)  lottery. 
A)  market price. 
B)  auction. 
C)  first-come, first-served. 
D)  lottery.

Question 12

-In the above figure, if the market produces the efficient amount of purses, then consumer surplus equals triangle

Accepted Answer

A)  abc. 
B)  bcd. 
C)  adc. 
D)  cgf. 
A)  abc. 
B)  bcd. 
C)  adc. 
D)  cgf.

Question 13

-The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will ________ and the producer surplus will ________.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase

Question 14

-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social benefit from the last pound is

Accepted Answer

A)  $1.00. 
B)  $2.50. 
C)  $3.00. 
D)  $4.00. 
A)  $1.00. 
B)  $2.50. 
C)  $3.00. 
D)  $4.00.

Question 15

The value of one more unit of a good or service is its marginal benefit.

Accepted Answer

A) True 
 B)False

Question 16

-In the above figure, as output increases from 0 units to 10 units to 20 units to 30 units, the deadweight loss

Accepted Answer

A)  falls. 
B)  falls at first, then rises. 
C)  rises. 
D)  rises at first, then falls. 
A)  falls. 
B)  falls at first, then rises. 
C)  rises. 
D)  rises at first, then falls.

Question 17

A firm that is the only seller of a product and is in sole control of a market has a

Accepted Answer

A)  monopoly. 
B)  quantity regulations. 
C)  subsidy. 
D)  public good. 
A)  monopoly. 
B)  quantity regulations. 
C)  subsidy. 
D)  public good.

Question 18

Which of the following CORRECTLY defines utilitarianism?

Accepted Answer

A)  Cost will increase if production increases. 
B)  The difference between what a consumer is willing to pay and what actually has to be paid. 
C)  Society should strive to achieve the greatest good for the greatest number. 
D)  Equality will not result in efficient outcomes. 
A)  Cost will increase if production increases. 
B)  The difference between what a consumer is willing to pay and what actually has to be paid. 
C)  Society should strive to achieve the greatest good for the greatest number. 
D)  Equality will not result in efficient outcomes.

Question 19

As a method of resource allocation, market price

Accepted Answer

A)  means those who are willing and able to pay get a particular good or service. 
B)  works well when self-interest must be suppressed. 
C)  works best inside firms and government departments. 
D)  is efficient when there is no effective way to distinguish among potential users of a scarce resource. 
A)  means those who are willing and able to pay get a particular good or service. 
B)  works well when self-interest must be suppressed. 
C)  works best inside firms and government departments. 
D)  is efficient when there is no effective way to distinguish among potential users of a scarce resource.

Question 20

What are the two views of fairness? How does each view redistribution of income from the rich to the poor?

Accepted Answer

One view is that "it's not fair if the r

-In the above figure, if output is 30 units, then the total deadweight loss is

-Suppose consumers decide they value a product more highly than before. Then the efficient quantity to produce of that product ________.

Susan thinks the only fair outcome is one in which she has three slices of pizza a week. Susan is using a(n) ________ concept of fairness.

-The above table gives the market demand and market supply schedules for soda. There are no external benefits or external costs. What is the efficient quantity of soda?

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then the maximum that Dana is willing to pay for the 8th gallon of ice cream is

At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then

-In the above figure, the second ton of wheat would be produced even though the producer surplus on it is zero if the price per ton of wheat was

-The figure above shows the market for umbrellas in Sunville. Suppose one firm owns all umbrella stores in Sunville and charges $40 per umbrella. In this situation, the market for umbrellas is

"If the price of a ticket to Sea World exceeds the marginal cost of the ticket by $13, a producer surplus exists for Sea World." Is this statement true or false?

-In the above figure, if the market produces the efficient amount of purses, then consumer surplus equals triangle

-The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will and the producer surplus will .

-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social benefit from the last pound is

The value of one more unit of a good or service is its marginal benefit.

-In the above figure, as output increases from 0 units to 10 units to 20 units to 30 units, the deadweight loss

A firm that is the only seller of a product and is in sole control of a market has a

Which of the following CORRECTLY defines utilitarianism?

As a method of resource allocation, market price

What are the two views of fairness? How does each view redistribution of income from the rich to the poor?

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

-In the above figure, if output is 30 units, then the total deadweight loss is

-Suppose consumers decide they value a product more highly than before. Then the efficient quantity to produce of that product ________.

Susan thinks the only fair outcome is one in which she has three slices of pizza a week. Susan is using a(n) ________ concept of fairness.

-The above table gives the market demand and market supply schedules for soda. There are no external benefits or external costs. What is the efficient quantity of soda?

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then the maximum that Dana is willing to pay for the 8th gallon of ice cream is

At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then

-In the above figure, the second ton of wheat would be produced even though the producer surplus on it is zero if the price per ton of wheat was

-The figure above shows the market for umbrellas in Sunville. Suppose one firm owns all umbrella stores in Sunville and charges $40 per umbrella. In this situation, the market for umbrellas is

"If the price of a ticket to Sea World exceeds the marginal cost of the ticket by $13, a producer surplus exists for Sea World." Is this statement true or false?

-In the above figure, if the market produces the efficient amount of purses, then consumer surplus equals triangle

-The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will ________ and the producer surplus will ________.

-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social benefit from the last pound is

The value of one more unit of a good or service is its marginal benefit.

-In the above figure, as output increases from 0 units to 10 units to 20 units to 30 units, the deadweight loss

A firm that is the only seller of a product and is in sole control of a market has a

Which of the following CORRECTLY defines utilitarianism?

As a method of resource allocation, market price

What are the two views of fairness? How does each view redistribution of income from the rich to the poor?

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 figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will and the producer surplus will .