Question 1

Alice is willing to pay $3 for the second slice of pizza she eats. The price she pays is $2. Alice's consumer surplus for this slice of pizza equals

Accepted Answer

A)  $0. 
B)  $1. 
C)  $2. 
D)  $3. 
A)  $0. 
B)  $1. 
C)  $2. 
D)  $3.

Question 2

-In the above figure, what is the efficient quantity of hot dogs to produce?

Accepted Answer

A)  2 thousand per day 
B)  4 thousand per day 
C)  6 thousand per day 
D)  The efficient quantity cannot be determined without knowing the PPF for this economy. 
A)  2 thousand per day 
B)  4 thousand per day 
C)  6 thousand per day 
D)  The efficient quantity cannot be determined without knowing the PPF for this economy.

Question 3

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. What is the value of market consumer surplus?

Accepted Answer

A)  $16 
B)  $52 
C)  $40 
D)  $12 
A)  $16 
B)  $52 
C)  $40 
D)  $12

Question 4

-In the figure above, when the price of a CD is $8.00, total producer surplus from all the CDs will be

Accepted Answer

A)  zero. 
B)  greater than at $10.00 per CD. 
C)  $20 million. 
D)  $10 million. 
A)  zero. 
B)  greater than at $10.00 per CD. 
C)  $20 million. 
D)  $10 million.

Question 5

-The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

Accepted Answer

A)  $5. 
B)  $10. 
C)  $25. 
D)  $125. 
A)  $5. 
B)  $10. 
C)  $25. 
D)  $125.

Question 6

The decrease in consumer surplus and producer surplus that results from an inefficient level of production is called the

Accepted Answer

A)  external cost. 
B)  external benefit. 
C)  deadweight loss. 
D)  big tradeoff. 
A)  external cost. 
B)  external benefit. 
C)  deadweight loss. 
D)  big tradeoff.

Question 7

-The figure above shows the market for coffee. If more coffee plantations are planted in Brazil and Vietnam so that the supply of coffee increases, the efficient quantity of coffee will ________ and the consumer 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 8

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the

Accepted Answer

A)  marginal social cost curve of chocolate. 
B)  marginal social benefit curve of chocolate. 
C)  opportunity cost curve of chocolate. 
D)  marginal social benefit curve minus the marginal social cost curve of chocolate. 
A)  marginal social cost curve of chocolate. 
B)  marginal social benefit curve of chocolate. 
C)  opportunity cost curve of chocolate. 
D)  marginal social benefit curve minus the marginal social cost curve of chocolate.

Question 9

-Suppose the marginal cost of producing a good falls so that the marginal social cost curve shifts downward. Then the efficient quantity to produce of that product

Accepted Answer

A)  increases. 
B)  does not change. 
C)  decreases. 
D)  could increase, stay the same, or decrease. 
A)  increases. 
B)  does not change. 
C)  decreases. 
D)  could increase, stay the same, or decrease.

Question 10

The drought in the Midwest over the summer has decreased the supply of corn and, as a result, brought a sharp increase in the price of corn. (Source: The Economist, August 4, 2012) The increase in the price of corn

Accepted Answer

A)  always increases consumer surplus. 
B)  always decreases consumer surplus. 
C)  does not affect consumer surplus because this change reflects only a movement along the demand curve. 
D)  increases consumer surplus if demand is elastic and decreases consumer surplus if demand is inelastic. 
A)  always increases consumer surplus. 
B)  always decreases consumer surplus. 
C)  does not affect consumer surplus because this change reflects only a movement along the demand curve. 
D)  increases consumer surplus if demand is elastic and decreases consumer surplus if demand is inelastic.

Question 11

The opportunity cost to the consumer of purchasing and consuming one more unit of a good is called the marginal benefit.

Accepted Answer

A) True 
 B)False

Question 12

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When marginal social benefit is equal to the marginal social cost of coffee in Kaffenia

Accepted Answer

A)  three hundred pounds per day will be produced and consumed. 
B)  the efficient quantity of coffee is being produced and consumed. 
C)  any decrease in coffee consumption or production would result in a deadweight loss. 
D)  All of the above are correct. 
A)  three hundred pounds per day will be produced and consumed. 
B)  the efficient quantity of coffee is being produced and consumed. 
C)  any decrease in coffee consumption or production would result in a deadweight loss. 
D)  All of the above are correct.

Question 13

Underproduction of good ________ create a deadweight loss and overproduction of a good ________ create a deadweight loss.

Accepted Answer

A)  will; will 
B)  will; will not 
C)  will not; will 
D)  will not; will not 
A)  will; will 
B)  will; will not 
C)  will not; will 
D)  will not; will not

Question 14

-The figure above shows the market for coffee. If 10 million pounds of coffee a month are available, the ________ price that consumers are willing to pay for the last pound is ________.

Accepted Answer

A)  maximum; $2.00 
B)  maximum; $3.50 
C)  minimum; $2.00 
D)  minimum; $3.50 
A)  maximum; $2.00 
B)  maximum; $3.50 
C)  minimum; $2.00 
D)  minimum; $3.50

Question 15

Using the "It's not fair if the result isn't fair" principle of fairness, an income tax designed to transfer wealth from the rich to the poor

Accepted Answer

A)  increases efficiency and equity. 
B)  increases efficiency and does not affect equity. 
C)  decreases efficiency and increases equity. 
D)  decreases efficiency and equity. 
A)  increases efficiency and equity. 
B)  increases efficiency and does not affect equity. 
C)  decreases efficiency and increases equity. 
D)  decreases efficiency and equity.

Question 16

-The figure above shows the market demand curve for pizza.
a) What is the marginal social benefit of the 20th pizza?
b) What is the maximum price a consumer is willing to pay for the 20th pizza?
c) If the price of a pizza is $6, what is the consumer surplus of the 20th pizza?
d) If the price of a pizza is $10, what is the consumer surplus?
e) If the price of a pizza is $6, what is the consumer surplus?

Accepted Answer

a) The marginal social benefit of the 20

Question 17

-In the above figure, what is the amount of consumer surplus at the efficient quantity?

Accepted Answer

A)  $0 
B)  $1,000 
C)  $2,000 
D)  $4,000 
A)  $0 
B)  $1,000 
C)  $2,000 
D)  $4,000

Question 18

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________.

Accepted Answer

A)  maximum; $2.50 
B)  minimum; $2.50 
C)  maximum; $3.25 
D)  minimum; $3.25 
A)  maximum; $2.50 
B)  minimum; $2.50 
C)  maximum; $3.25 
D)  minimum; $3.25

Question 19

The figure shows the competitive market for milk.
-In the figure above, when the market is in equilibrium, what is the total surplus?

Accepted Answer

A)  $1,000 
B)  $800 
C)  $200 
D)  $1,600 
A)  $1,000 
B)  $800 
C)  $200 
D)  $1,600

Question 20

Explain the principle "Make the poorest as well off as possible." Who proposed it?

Accepted Answer

This principle was proposed by John Rawl

Alice is willing to pay $3 for the second slice of pizza she eats. The price she pays is $2. Alice's consumer surplus for this slice of pizza equals

-In the above figure, what is the efficient quantity of hot dogs to produce?

-In the figure above, when the price of a CD is $8.00, total producer surplus from all the CDs will be

-The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

The decrease in consumer surplus and producer surplus that results from an inefficient level of production is called the

-The figure above shows the market for coffee. If more coffee plantations are planted in Brazil and Vietnam so that the supply of coffee increases, the efficient quantity of coffee will and the consumer surplus will .

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the

-Suppose the marginal cost of producing a good falls so that the marginal social cost curve shifts downward. Then the efficient quantity to produce of that product

The drought in the Midwest over the summer has decreased the supply of corn and, as a result, brought a sharp increase in the price of corn. (Source: The Economist, August 4, 2012) The increase in the price of corn

The opportunity cost to the consumer of purchasing and consuming one more unit of a good is called the marginal benefit.

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When marginal social benefit is equal to the marginal social cost of coffee in Kaffenia

Underproduction of good create a deadweight loss and overproduction of a good create a deadweight loss.

-The figure above shows the market for coffee. If 10 million pounds of coffee a month are available, the price that consumers are willing to pay for the last pound is .

Using the "It's not fair if the result isn't fair" principle of fairness, an income tax designed to transfer wealth from the rich to the poor

-In the above figure, what is the amount of consumer surplus at the efficient quantity?

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the price that consumers are willing to pay for the last gallon is .

The figure shows the competitive market for milk. -In the figure above, when the market is in equilibrium, what is the total surplus?

Explain the principle "Make the poorest as well off as possible." Who proposed it?

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

Alice is willing to pay $3 for the second slice of pizza she eats. The price she pays is $2. Alice's consumer surplus for this slice of pizza equals

-In the above figure, what is the efficient quantity of hot dogs to produce?

-In the figure above, when the price of a CD is $8.00, total producer surplus from all the CDs will be

-The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

The decrease in consumer surplus and producer surplus that results from an inefficient level of production is called the

-The figure above shows the market for coffee. If more coffee plantations are planted in Brazil and Vietnam so that the supply of coffee increases, the efficient quantity of coffee will ________ and the consumer surplus will ________.

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the

-Suppose the marginal cost of producing a good falls so that the marginal social cost curve shifts downward. Then the efficient quantity to produce of that product

The drought in the Midwest over the summer has decreased the supply of corn and, as a result, brought a sharp increase in the price of corn. (Source: The Economist, August 4, 2012) The increase in the price of corn

The opportunity cost to the consumer of purchasing and consuming one more unit of a good is called the marginal benefit.

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When marginal social benefit is equal to the marginal social cost of coffee in Kaffenia

Underproduction of good ________ create a deadweight loss and overproduction of a good ________ create a deadweight loss.

-The figure above shows the market for coffee. If 10 million pounds of coffee a month are available, the ________ price that consumers are willing to pay for the last pound is ________.

Using the "It's not fair if the result isn't fair" principle of fairness, an income tax designed to transfer wealth from the rich to the poor

-In the above figure, what is the amount of consumer surplus at the efficient quantity?

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________.

The figure shows the competitive market for milk. -In the figure above, when the market is in equilibrium, what is the total surplus?

Explain the principle "Make the poorest as well off as possible." Who proposed it?

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. If more coffee plantations are planted in Brazil and Vietnam so that the supply of coffee increases, the efficient quantity of coffee will and the consumer surplus will .

Underproduction of good create a deadweight loss and overproduction of a good create a deadweight loss.

-The figure above shows the market for coffee. If 10 million pounds of coffee a month are available, the price that consumers are willing to pay for the last pound is .

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the price that consumers are willing to pay for the last gallon is .