Question 1

-In the above figure, when the efficient quantity of gloves is produced, the total consumer surplus is

Accepted Answer

A)  $3,000. 
B)  $15,000. 
C)  $22,500. 
D)  $45,000. 
A)  $3,000. 
B)  $15,000. 
C)  $22,500. 
D)  $45,000.

Question 2

-In the above figure, the total consumer surplus at the efficient level of output is ________.

Accepted Answer

A)  $4.5 million 
B)  $9.0 million 
C)  $2.5 million 
D)  $8.5 million 
A)  $4.5 million 
B)  $9.0 million 
C)  $2.5 million 
D)  $8.5 million

Question 3

-The figure above shows Cindy's demand for CDs per year.
a) What is Cindy's total consumer surplus if the price of a CD is $12?
b) What is Cindy's total consumer surplus if the price of a CD is $9?
c) What happens to Cindy's consumer surplus when the price of a CD falls?

Accepted Answer

a) Her consumer surplus when the price o

Question 4

Market failure is the situation in which a market delivers an inefficient outcome.

Accepted Answer

A) True 
 B)False

Question 5

-Jason hires Maria to tutor him in economics. Jason is willing to pay $30 for the first hour of tutoring, $25 for the second, $20 for the third, $15 for the fourth, and $10 for the fifth. Maria has an opportunity cost per hour of $6 for the first, $9 for the second, $12 for the third, $15 for the fourth, and $18 for the fifth. What will be the equilibrium quantity of hours tutored and the equilibrium price? Explain why this quantity and price is the equilibrium. What is Jason's consumer surplus and what is Maria's producer surplus?

Accepted Answer

The equilibrium quantity will be 4 hours

Question 6

Utilitarianism is a principle whose goal is ________.

Accepted Answer

A)  the greatest happiness for the greatest number 
B)  the greatest pay for the greatest number 
C)  equal pay for equal work 
D)  equal happiness for all workers 
A)  the greatest happiness for the greatest number 
B)  the greatest pay for the greatest number 
C)  equal pay for equal work 
D)  equal happiness for all workers

Question 7

-In the above figure, the total producer surplus at the efficient level of output is ________.

Accepted Answer

A)  $4.5 million 
B)  $9.0 million 
C)  $2.5 million 
D)  $3.0 million 
A)  $4.5 million 
B)  $9.0 million 
C)  $2.5 million 
D)  $3.0 million

Question 8

Which of the following is TRUE?

Accepted Answer

A)  When a market price allocates resources, all people who are willing and able to pay that price get the resource. 
B)  A command system works well when the range of activities to be monitored is large and complex. 
C)  When the government decides how to allocate tax dollars among competing uses, resources are allocated by market prices. 
D)  When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a lottery. 
A)  When a market price allocates resources, all people who are willing and able to pay that price get the resource. 
B)  A command system works well when the range of activities to be monitored is large and complex. 
C)  When the government decides how to allocate tax dollars among competing uses, resources are allocated by market prices. 
D)  When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a lottery.

Question 9

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon and Dana is allowed to buy only 8 gallons of ice cream, then her consumer surplus on the 8th gallon is

Accepted Answer

A)  $1. 
B)  $2. 
C)  $3. 
D)  $8. 
A)  $1. 
B)  $2. 
C)  $3. 
D)  $8.

Question 10

When 2,000 hamburgers per day are produced, the marginal social benefit is $1.50 and the marginal social cost is $1.00. And when 7,500 hamburgers per day are produced, the marginal social benefit is $1.00 and the marginal social cost is $1.50. The efficient production quantity of hamburgers is ________ a day.

Accepted Answer

A)  more than 7,500 
B)  7,500 
C)  between 2,000 and 7,500 
D)  2,000 
A)  more than 7,500 
B)  7,500 
C)  between 2,000 and 7,500 
D)  2,000

Question 11

Robert Nozick asserts that fairness and efficiency result if

Accepted Answer

A)  there are price ceilings in the market. 
B)  there are external benefits and external costs in the market. 
C)  voluntary exchange occurs. 
D)  public goods are provided by government. 
A)  there are price ceilings in the market. 
B)  there are external benefits and external costs in the market. 
C)  voluntary exchange occurs. 
D)  public goods are provided by government.

Question 12

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the efficient quantity of doughnuts to produce each day?

Accepted Answer

A)  100 dozen 
B)  200 dozen 
C)  300 dozen 
D)  500 dozen 
A)  100 dozen 
B)  200 dozen 
C)  300 dozen 
D)  500 dozen

Question 13

The producer surplus on a unit of output is the difference between the market price and the opportunity cost of producing it.

Accepted Answer

A) True 
 B)False

Question 14

The market demand curve

Accepted Answer

A)  can also be the marginal social cost curve. 
B)  shows the value of a good that consumers must give up to get another unit of a different good. 
C)  by itself determines equilibrium prices. 
D)  can also be the marginal social benefit curve. 
A)  can also be the marginal social cost curve. 
B)  shows the value of a good that consumers must give up to get another unit of a different good. 
C)  by itself determines equilibrium prices. 
D)  can also be the marginal social benefit curve.

Question 15

A person will choose to buy a good as long as

Accepted Answer

A)  marginal benefit is at least as great as price. 
B)  consumer surplus is positive. 
C)  marginal benefit is positive. 
D)  consumer surplus is at least as great as price. 
A)  marginal benefit is at least as great as price. 
B)  consumer surplus is positive. 
C)  marginal benefit is positive. 
D)  consumer surplus is at least as great as price.

Question 16

-The above figure shows the competitive market for turkey. The producer surplus for the 300 millionth pound of turkey is

Accepted Answer

A)  $1.20 per pound. 
B)  $135 million. 
C)  $0.30 per pound. 
D)  $0.80 per pound. 
A)  $1.20 per pound. 
B)  $135 million. 
C)  $0.30 per pound. 
D)  $0.80 per pound.

Question 17

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too ________ sandwiches and too ________ of other goods.

Accepted Answer

A)  many; little 
B)  many; much 
C)  few; little 
D)  few; much 
A)  many; little 
B)  many; much 
C)  few; little 
D)  few; much

Question 18

"If the marginal social benefit of a car exceeds the marginal social cost of a car, we are producing too many cars." True or false? Explain.

Accepted Answer

False. If the marginal social benefit of

Question 19

The table below shows the demand schedules for pizza for Abby and Barry who are the only buyers in the market.  
-Based on the table, what is Barry's marginal benefit from the 40th slice of pizza?

Accepted Answer

A)  $3 
B)  $5.50 
C)  $0.50 
D)  $12 
A)  $3 
B)  $5.50 
C)  $0.50 
D)  $12

Question 20

Sam's demand curve for pizza

Accepted Answer

A)  lies above her marginal benefit curve for pizza. 
B)  lies below her marginal benefit curve for pizza. 
C)  is the same as her marginal benefit curve for pizza. 
D)  has one point in common with her marginal benefit curve for pizza. 
A)  lies above her marginal benefit curve for pizza. 
B)  lies below her marginal benefit curve for pizza. 
C)  is the same as her marginal benefit curve for pizza. 
D)  has one point in common with her marginal benefit curve for pizza.

-In the above figure, when the efficient quantity of gloves is produced, the total consumer surplus is

-In the above figure, the total consumer surplus at the efficient level of output is ________.

-The figure above shows Cindy's demand for CDs per year. a) What is Cindy's total consumer surplus if the price of a CD is $12? b) What is Cindy's total consumer surplus if the price of a CD is $9? c) What happens to Cindy's consumer surplus when the price of a CD falls?

Market failure is the situation in which a market delivers an inefficient outcome.

Utilitarianism is a principle whose goal is ________.

-In the above figure, the total producer surplus at the efficient level of output is ________.

Which of the following is TRUE?

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon and Dana is allowed to buy only 8 gallons of ice cream, then her consumer surplus on the 8th gallon is

Robert Nozick asserts that fairness and efficiency result if

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the efficient quantity of doughnuts to produce each day?

The producer surplus on a unit of output is the difference between the market price and the opportunity cost of producing it.

The market demand curve

A person will choose to buy a good as long as

-The above figure shows the competitive market for turkey. The producer surplus for the 300 millionth pound of turkey is

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too sandwiches and too of other goods.

"If the marginal social benefit of a car exceeds the marginal social cost of a car, we are producing too many cars." True or false? Explain.

The table below shows the demand schedules for pizza for Abby and Barry who are the only buyers in the market. -Based on the table, what is Barry's marginal benefit from the 40th slice of pizza?

Sam's demand curve for pizza

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, when the efficient quantity of gloves is produced, the total consumer surplus is

-In the above figure, the total consumer surplus at the efficient level of output is ________.

-The figure above shows Cindy's demand for CDs per year. a) What is Cindy's total consumer surplus if the price of a CD is $12? b) What is Cindy's total consumer surplus if the price of a CD is $9? c) What happens to Cindy's consumer surplus when the price of a CD falls?

Market failure is the situation in which a market delivers an inefficient outcome.

Utilitarianism is a principle whose goal is ________.

-In the above figure, the total producer surplus at the efficient level of output is ________.

Which of the following is TRUE?

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon and Dana is allowed to buy only 8 gallons of ice cream, then her consumer surplus on the 8th gallon is

Robert Nozick asserts that fairness and efficiency result if

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the efficient quantity of doughnuts to produce each day?

The producer surplus on a unit of output is the difference between the market price and the opportunity cost of producing it.

The market demand curve

A person will choose to buy a good as long as

-The above figure shows the competitive market for turkey. The producer surplus for the 300 millionth pound of turkey is

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too ________ sandwiches and too ________ of other goods.

"If the marginal social benefit of a car exceeds the marginal social cost of a car, we are producing too many cars." True or false? Explain.

The table below shows the demand schedules for pizza for Abby and Barry who are the only buyers in the market. -Based on the table, what is Barry's marginal benefit from the 40th slice of pizza?

Sam's demand curve for pizza

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

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too sandwiches and too of other goods.