Question 1

-In the figure above, when the market is in equilibrium, total consumer surplus on all the CDs bought will be

Accepted Answer

A)  greater than $30 million. 
B)  less than at any other price. 
C)  $20 million. 
D)  less than $15 million. 
A)  greater than $30 million. 
B)  less than at any other price. 
C)  $20 million. 
D)  less than $15 million.

Question 2

If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss.
II) decreases total surplus.

Accepted Answer

A)  Only I is correct. 
B)  Only II is correct. 
C)  Both I and II are correct. 
D)  Neither I nor II is correct. 
A)  Only I is correct. 
B)  Only II is correct. 
C)  Both I and II are correct. 
D)  Neither I nor II is correct.

Question 3

In the competitive market for balloon rides, marginal social cost equals marginal social benefit when 3,000 balloon rides a day are taken and the price of a ride is $130. Which of the following statements is TRUE?

Accepted Answer

A)  There is a free-rider problem. 
B)  Too many rides are available. 
C)  Too few rides are available and the price of a balloon ride is too high. 
D)  The efficient quantity of balloon rides is 3,000 a day. 
A)  There is a free-rider problem. 
B)  Too many rides are available. 
C)  Too few rides are available and the price of a balloon ride is too high. 
D)  The efficient quantity of balloon rides is 3,000 a day.

Question 4

According to John Rawls, the fair distribution of income is the one that

Accepted Answer

A)  makes the poorest person as well off as possible. 
B)  makes the average person as well off as possible. 
C)  results in equal income for all society members. 
D)  is based on fair rules. 
A)  makes the poorest person as well off as possible. 
B)  makes the average person as well off as possible. 
C)  results in equal income for all society members. 
D)  is based on fair rules.

Question 5

-The figure above shows the market for hot dogs.
a) What is the maximum price consumers are willing to pay for the 25th hot dog?
b) What is the efficient quantity?
c) Suppose that the production was limited to 25 hot dogs. In the figure, indicate the amount of the deadweight loss.

Accepted Answer

a) Consumers are willing to pay a maximu

Question 6

-The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss?

Accepted Answer

A)  $2,000 
B)  $800 
C)  $0 
D)  600 umbrellas 
A)  $2,000 
B)  $800 
C)  $0 
D)  600 umbrellas

Question 7

-In the above figure, suppose the government subsidizes the production of milk so that milk production increases to 8 million gallons per day. What is the size of the deadweight loss? (Hint: It is equal to the triangular area of negative consumer and producer surplus that results when output exceeds the efficient level.)

Accepted Answer

A)  $12.5 million 
B)  $6.25 million 
C)  $4.50 million 
D)  $2.25 million 
A)  $12.5 million 
B)  $6.25 million 
C)  $4.50 million 
D)  $2.25 million

Question 8

-In the above figure, when the efficient quantity is produced the marginal social benefit of the last magazine is

Accepted Answer

A)  $1. 
B)  $3. 
C)  $5. 
D)  some amount not given in the above three answers. 
A)  $1. 
B)  $3. 
C)  $5. 
D)  some amount not given in the above three answers.

Question 9

-In the above figure, when the efficient quantity is produced the marginal social cost of the last magazine is

Accepted Answer

A)  $1. 
B)  $3. 
C)  $5. 
D)  some amount not given in the above three answers. 
A)  $1. 
B)  $3. 
C)  $5. 
D)  some amount not given in the above three answers.

Question 10

Which of the following represents the marginal cost of a soda? I. The opportunity cost of producing another soda.
II) The minimum price someone is willing to pay for another soda.

Accepted Answer

A)  I only 
B)  II only 
C)  I and II 
D)  Neither I nor II 
A)  I only 
B)  II only 
C)  I and II 
D)  Neither I nor II

Question 11

-The figure illustrates the market for haircuts. Curve A is the ________ curve, and curve B is the ________ curve.

Accepted Answer

A)  marginal social cost; marginal social benefit 
B)  total social cost; total social benefit 
C)  opportunity cost; opportunity benefit 
D)  marginal social benefit; marginal social cost 
A)  marginal social cost; marginal social benefit 
B)  total social cost; total social benefit 
C)  opportunity cost; opportunity benefit 
D)  marginal social benefit; marginal social cost

Question 12

-In the above figure, when the efficient quantity of gloves is produced, the total producer 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 13

Which of the following conditions could lead to an inefficient quantity of pretzels being produced?

Accepted Answer

A)  the existence of many producers of pretzels 
B)  the existence of many consumers of pretzels 
C)  the existence of a single producer and seller of pretzels 
D)  All of the above conditions could cause the actual quantity of pretzels to be an inefficient quantity. 
A)  the existence of many producers of pretzels 
B)  the existence of many consumers of pretzels 
C)  the existence of a single producer and seller of pretzels 
D)  All of the above conditions could cause the actual quantity of pretzels to be an inefficient quantity.

Question 14

-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 100th 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 15

Can both producer surplus and consumer surplus exist at the same time in a particular market?

Accepted Answer

Yes. The actual price can be a

Question 16

-In the above figure, the lowest price for which the firm will sell its second ton of wheat is

Accepted Answer

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

Question 17

Is the marginal benefit someone receives from a good or service the same as the price the person pays? Explain your answer.

Accepted Answer

Generally the marginal benefit of a good

Question 18

The producer surplus on a unit of a good is the

Accepted Answer

A)  difference between the marginal social benefit and the marginal social cost. 
B)  number of dollars' worth of other goods and services forgone to produce this unit of the good. 
C)  difference between the price of the good and the marginal cost of producing the good. 
D)  difference between the total cost of the good and the marginal cost. 
A)  difference between the marginal social benefit and the marginal social cost. 
B)  number of dollars' worth of other goods and services forgone to produce this unit of the good. 
C)  difference between the price of the good and the marginal cost of producing the good. 
D)  difference between the total cost of the good and the marginal cost.

Question 19

If the marginal cost of producing every quantity decreases, all the following occur EXCEPT

Accepted Answer

A)  minimum supply price does not change. 
B)  the marginal social benefit of the last unit bought changes. 
C)  the consumer surplus increases. 
D)  the efficient quantity increases. 
A)  minimum supply price does not change. 
B)  the marginal social benefit of the last unit bought changes. 
C)  the consumer surplus increases. 
D)  the efficient quantity increases.

Question 20

What are some of the potential obstacles that can prevent a market from reaching the efficient outcome? Briefly define each obstacle.

Accepted Answer

With one exception, the obstacles basica

-In the figure above, when the market is in equilibrium, total consumer surplus on all the CDs bought will be

If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss. II) decreases total surplus.

In the competitive market for balloon rides, marginal social cost equals marginal social benefit when 3,000 balloon rides a day are taken and the price of a ride is $130. Which of the following statements is TRUE?

According to John Rawls, the fair distribution of income is the one that

-The figure above shows the market for hot dogs. a) What is the maximum price consumers are willing to pay for the 25th hot dog? b) What is the efficient quantity? c) Suppose that the production was limited to 25 hot dogs. In the figure, indicate the amount of the deadweight loss.

-The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss?

-In the above figure, when the efficient quantity is produced the marginal social benefit of the last magazine is

-In the above figure, when the efficient quantity is produced the marginal social cost of the last magazine is

Which of the following represents the marginal cost of a soda? I. The opportunity cost of producing another soda. II) The minimum price someone is willing to pay for another soda.

-The figure illustrates the market for haircuts. Curve A is the curve, and curve B is the curve.

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

Which of the following conditions could lead to an inefficient quantity of pretzels being produced?

-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 100th dozen doughnuts each day?

Can both producer surplus and consumer surplus exist at the same time in a particular market?

-In the above figure, the lowest price for which the firm will sell its second ton of wheat is

Is the marginal benefit someone receives from a good or service the same as the price the person pays? Explain your answer.

The producer surplus on a unit of a good is the

If the marginal cost of producing every quantity decreases, all the following occur EXCEPT

What are some of the potential obstacles that can prevent a market from reaching the efficient outcome? Briefly define each obstacle.

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 figure above, when the market is in equilibrium, total consumer surplus on all the CDs bought will be

If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss. II) decreases total surplus.

In the competitive market for balloon rides, marginal social cost equals marginal social benefit when 3,000 balloon rides a day are taken and the price of a ride is $130. Which of the following statements is TRUE?

According to John Rawls, the fair distribution of income is the one that

-The figure above shows the market for hot dogs. a) What is the maximum price consumers are willing to pay for the 25th hot dog? b) What is the efficient quantity? c) Suppose that the production was limited to 25 hot dogs. In the figure, indicate the amount of the deadweight loss.

-The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss?

-In the above figure, when the efficient quantity is produced the marginal social benefit of the last magazine is

-In the above figure, when the efficient quantity is produced the marginal social cost of the last magazine is

Which of the following represents the marginal cost of a soda? I. The opportunity cost of producing another soda. II) The minimum price someone is willing to pay for another soda.

-The figure illustrates the market for haircuts. Curve A is the ________ curve, and curve B is the ________ curve.

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

Which of the following conditions could lead to an inefficient quantity of pretzels being produced?

-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 100th dozen doughnuts each day?

Can both producer surplus and consumer surplus exist at the same time in a particular market?

-In the above figure, the lowest price for which the firm will sell its second ton of wheat is

Is the marginal benefit someone receives from a good or service the same as the price the person pays? Explain your answer.

The producer surplus on a unit of a good is the

If the marginal cost of producing every quantity decreases, all the following occur EXCEPT

What are some of the potential obstacles that can prevent a market from reaching the efficient outcome? Briefly define each obstacle.

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 illustrates the market for haircuts. Curve A is the curve, and curve B is the curve.