Exam 5: Efficiency and Equity

Which of the following ideas describes the concept of "utilitarianism"? I. Utilitarianism gained popularity in the 1930s. II) Utilitarians believed that a society should use only competitive markets to allocate resources. III) Utilitarians claimed that taking money from rich people and giving it to poorer people would make the economy more fair.

-The above figure shows Dana's marginal benefit curve for ice cream. If the market price is $2 per gallon, then Dana's consumer surplus from the 4th gallon of ice cream is

The cost of producing one more pizza is the

When the competitive market is using its resources efficiently, the

American Idol is a popular television program where contestants compete to win a $1 million record deal. To determine the winner, fans either dial the number or send a text message indicating their favorite contestant. The contestant with the highest number of texts and phone calls wins. What is the scarce resource in this example?

Explain the modified version of utilitarianism proposed in the book entitled "A Theory of Justice," by the philosopher John Rawls and its relationship to the "big tradeoff."

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social cost of producing the 250th pound of chocolate each day?

In the United States, resources are most often allocated by

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When 400 pounds of coffee are produced and consumed in Kaffenia each day, that is

-At the competitive market outcome in the above figure, the

-In the above figure, at the equilibrium price and quantity, consumer surplus is ________.

What is the "big tradeoff"?

-The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month

At the current level of output, the marginal social benefit from a slice of pizza is less than the marginal social cost of producing a slice of pizza. Resources will be used more efficiently if ________ slices of pizza are produced and ________ other goods are produced.

The table below shows the supply schedules for Fred's Pizza and Johnny's Pizza, the only sellers of pizza in the market. -Using the table, Fred's marginal cost of the 200th slice of pizza is

-The figure above shows Clara's demand for CDs. The price for a CD is $15. Which statement is TRUE?

Quantity of tennisrackets demanded -Jill and Jed have individual demand curves for tennis rackets given in the table above and are the only two demanders in the market. What is the market quantity demanded at the price of $30?

Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11 then the market supply for this good will be

The annual Great Sofa Round-up is a collaborative event between Colorado State University and the City of Fort Collins aims to help students and neighbors get rid of unwanted furniture, while giving people in need access to inexpensive sofas. Suppose on the day of the Round-up, your friends take their couches to the main parking lot on campus where the Round-up is held. Raj will not sell his couch for less than $30, Emily will not sell her couch for less than $50, Nara will not sell her couch for less than $20, Sergio just wants to get rid of his couch and he is willing to give it away for free. At the Round-up, potential buyers think that all the couches available are basically the same and they are willing to buy a couch for $50. Who will sell their couch?

Buyers receive a consumer surplus when the price exceeds the marginal benefit.