Question 1

Marginal cost is the minimum price that producers must receive to induce them to produce another unit of a good or service.

Accepted Answer

A) True 
 B)False

Question 2

The market demand curve for coffee is the same as the

Accepted Answer

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

Question 3

Asian women lag far behind the West in their representation in management level positions. The report by the McKinsley consulting company suggests that there is an opportunity for companies to recruit under-utilized female talent and do well financially as a result. (Source: The Economist, July 7, 2012) The fact that Asian women are currently less likely to be hired as managers is a result of the allocation system using which of the following methods for hiring?

Accepted Answer

A)  lottery 
B)  auction 
C)  first-come, first-served 
D)  personal characteristics 
A)  lottery 
B)  auction 
C)  first-come, first-served 
D)  personal characteristics

Question 4

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 Chloe's consumer surplus?

Accepted Answer

A)  $0 
B)  $12 
C)  $10 
D)  Chloe will not purchase the magazine. 
A)  $0 
B)  $12 
C)  $10 
D)  Chloe will not purchase the magazine.

Question 5

-In the above figure

Accepted Answer

A)  marginal social cost equals marginal social benefit when 300,000 purses are produced. 
B)  500,000 purses should be sold for $50 each for an efficient outcome. 
C)  it is impossible to determine the efficient quantity of purses. 
D)  None of the above answers is correct. 
A)  marginal social cost equals marginal social benefit when 300,000 purses are produced. 
B)  500,000 purses should be sold for $50 each for an efficient outcome. 
C)  it is impossible to determine the efficient quantity of purses. 
D)  None of the above answers is correct.

Question 6

-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, the deadweight loss is

Accepted Answer

A)  zero. 
B)  $7.5 million. 
C)  $15 million. 
D)  $10 million 
A)  zero. 
B)  $7.5 million. 
C)  $15 million. 
D)  $10 million

Question 7

In the market for DVDs, 500,000 DVDs a month are available. The value people place on the 500,000th DVD a month is less than the marginal social cost of producing it. Resource use ________.

Accepted Answer

A)  is efficient 
B)  is inefficient 
C)  would be more efficient if people firms would produce more DVDs 
D)  would be more efficient if people would buy more DVDs 
A)  is efficient 
B)  is inefficient 
C)  would be more efficient if people firms would produce more DVDs 
D)  would be more efficient if people would buy more DVDs

Question 8

If the marginal cost of producing hair styling decreases, then the efficient quantity of hair stylings to produce ________.

Accepted Answer

A)  depends on the marginal benefit 
B)  remains the same 
C)  decreases 
D)  increases 
A)  depends on the marginal benefit 
B)  remains the same 
C)  decreases 
D)  increases

Question 9

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. There is no external cost. What is the marginal cost to the economy of Kaffenia of producing the four hundredth pound of coffee each day?

Accepted Answer

A)  $.50 per pound 
B)  $1.00 per pound 
C)  $2.00 per pound 
D)  $4.00 per pound 
A)  $.50 per pound 
B)  $1.00 per pound 
C)  $2.00 per pound 
D)  $4.00 per pound

Question 10

Stefano has just completed an original oil painting. After considering the costs for brushes, paint, canvas, and the value of Stefano's labor time, the marginal cost of the painting is $1,000. Lucky Stefano. One art lover paid him $1,500. How much producer surplus did Stefano obtain?

Accepted Answer

A)  The amount of producer surplus cannot be determined from the information given. 
B)  $1,500 
C)  $1,000 
D)  $500 
A)  The amount of producer surplus cannot be determined from the information given. 
B)  $1,500 
C)  $1,000 
D)  $500

Question 11

-In the figure above, when production is 3 units with a price of $3, the consumer surplus equals

Accepted Answer

A)  a + b. 
B)  a + b + f + g. 
C)  a + b + f + g + h + l. 
D)  a + b + f + g + h + l + i + m. 
A)  a + b. 
B)  a + b + f + g. 
C)  a + b + f + g + h + l. 
D)  a + b + f + g + h + l + i + m.

Question 12

-The above table gives the market demand and market supply schedules for soda. What is the maximum price consumers are willing to pay for the 400th can of soda?

Accepted Answer

A)  $0.80 per can 
B)  $0.70 per can 
C)  $0.60 per can 
D)  $0.50 per can 
A)  $0.80 per can 
B)  $0.70 per can 
C)  $0.60 per can 
D)  $0.50 per can

Question 13

-The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is

Accepted Answer

A)  $10 million. 
B)  $20 million. 
C)  $60 million. 
D)  zero. 
A)  $10 million. 
B)  $20 million. 
C)  $60 million. 
D)  zero.

Question 14

-The table gives the demand and supply schedules for ice cream in Sweetsville in July and November. Assume that the only people who benefit from ice cream are the people who consume it and the only people who bear the cost of ice cream are the people who produce it.
a) Draw the market demand and market supply curves. What are the equilibrium price and equilibrium quantity of ice cream in July and November? Is the allocation of resources efficient in July? Is it efficient in November? Explain.
b) What is the maximum price that consumers are willing to pay for the 100th gallon of ice cream in July? In November? What is the minimum price that producers are willing to accept for the 100th gallon in July and November? Explain.
c) What happens to consumer surplus and producer surplus in November compared to July? Why?

Accepted Answer

@#IMG-DLM& a) The figure is shown above. In July,

Question 15

Sal likes to eat pizza. The ________ is the maximum amount that Sal is willing to pay for one more piece of pizza.

Accepted Answer

A)  efficient price 
B)  efficient amount 
C)  marginal benefit 
D)  marginal cost 
A)  efficient price 
B)  efficient amount 
C)  marginal benefit 
D)  marginal cost

Question 16

-The figure above shows the market for milk. If 100 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; $3.00 
C)  maximum; $4.00 
D)  minimum; $4.00 
A)  maximum; $2.50 
B)  minimum; $3.00 
C)  maximum; $4.00 
D)  minimum; $4.00

Question 17

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social cost to the economy of Kaffenia of producing the 300th dozen doughnuts each day?

Accepted Answer

A)  $10.00 per dozen 
B)  $8.00 per dozen 
C)  $6.00 per dozen 
D)  $4.00 per dozen 
A)  $10.00 per dozen 
B)  $8.00 per dozen 
C)  $6.00 per dozen 
D)  $4.00 per dozen

Question 18

-In the above figure, if the market price rises from $100 to $125 per ton of wheat, then producer surplus

Accepted Answer

A)  decreases. 
B)  does not change. 
C)  increases. 
D)  might increase, decrease, or not change depending on how the demand curve for wheat shifts. 
A)  decreases. 
B)  does not change. 
C)  increases. 
D)  might increase, decrease, or not change depending on how the demand curve for wheat shifts.

Question 19

Marginal benefit is the benefit received from ________.

Accepted Answer

A)  consuming more goods or services 
B)  producing the efficient quantity 
C)  consuming the efficient quantity 
D)  consuming one more unit of a good or service 
A)  consuming more goods or services 
B)  producing the efficient quantity 
C)  consuming the efficient quantity 
D)  consuming one more unit of a good or service

Question 20

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

Accepted Answer

There are two reasons why the big tradeo

Marginal cost is the minimum price that producers must receive to induce them to produce another unit of a good or service.

The market demand curve for coffee is the same as the

-In the above figure

-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, the deadweight loss is

In the market for DVDs, 500,000 DVDs a month are available. The value people place on the 500,000th DVD a month is less than the marginal social cost of producing it. Resource use ________.

If the marginal cost of producing hair styling decreases, then the efficient quantity of hair stylings to produce ________.

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. There is no external cost. What is the marginal cost to the economy of Kaffenia of producing the four hundredth pound of coffee each day?

Stefano has just completed an original oil painting. After considering the costs for brushes, paint, canvas, and the value of Stefano's labor time, the marginal cost of the painting is $1,000. Lucky Stefano. One art lover paid him $1,500. How much producer surplus did Stefano obtain?

-In the figure above, when production is 3 units with a price of $3, the consumer surplus equals

-The above table gives the market demand and market supply schedules for soda. What is the maximum price consumers are willing to pay for the 400th can of soda?

-The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is

Sal likes to eat pizza. The ________ is the maximum amount that Sal is willing to pay for one more piece of pizza.

-The figure above shows the market for milk. If 100 gallons of milk a day are available, the price that consumers are willing to pay for the last gallon is .

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social cost to the economy of Kaffenia of producing the 300th dozen doughnuts each day?

-In the above figure, if the market price rises from $100 to $125 per ton of wheat, then producer surplus

Marginal benefit is the benefit received from ________.

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

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

Marginal cost is the minimum price that producers must receive to induce them to produce another unit of a good or service.

The market demand curve for coffee is the same as the

-In the above figure

-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, the deadweight loss is

In the market for DVDs, 500,000 DVDs a month are available. The value people place on the 500,000th DVD a month is less than the marginal social cost of producing it. Resource use ________.

If the marginal cost of producing hair styling decreases, then the efficient quantity of hair stylings to produce ________.

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. There is no external cost. What is the marginal cost to the economy of Kaffenia of producing the four hundredth pound of coffee each day?

Stefano has just completed an original oil painting. After considering the costs for brushes, paint, canvas, and the value of Stefano's labor time, the marginal cost of the painting is $1,000. Lucky Stefano. One art lover paid him $1,500. How much producer surplus did Stefano obtain?

-In the figure above, when production is 3 units with a price of $3, the consumer surplus equals

-The above table gives the market demand and market supply schedules for soda. What is the maximum price consumers are willing to pay for the 400th can of soda?

-The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is

Sal likes to eat pizza. The ________ is the maximum amount that Sal is willing to pay for one more piece of pizza.

-The figure above shows the market for milk. If 100 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________.

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social cost to the economy of Kaffenia of producing the 300th dozen doughnuts each day?

-In the above figure, if the market price rises from $100 to $125 per ton of wheat, then producer surplus

Marginal benefit is the benefit received from ________.

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

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 milk. If 100 gallons of milk a day are available, the price that consumers are willing to pay for the last gallon is .