Question 1

A secondary market for the resale of baseball tickets,known as scalping:

Accepted Answer

A) prevents mutually beneficial exchanges. 
B) is likely to increase revenues for the team owner since season ticket holders can resell their tickets instead of not attending a game. 
C) is likely to increase season-ticket sales since some people who wouldn't have otherwise seen the game,will buy tickets. 
D) lowers the ability of the season ticket holders to attend a baseball game with their families. 
A) prevents mutually beneficial exchanges. 
B) is likely to increase revenues for the team owner since season ticket holders can resell their tickets instead of not attending a game. 
C) is likely to increase season-ticket sales since some people who wouldn't have otherwise seen the game,will buy tickets. 
D) lowers the ability of the season ticket holders to attend a baseball game with their families.

Question 2

Use the follwoing figure to answer the questions : Figure 6-2 shows an Edgeworth box with the preferences of Kathy and Tom toward bread and candy.  
-At point C in Figure 6-2,which of the following is true of the comparison between Tim's marginal ate of substitution of candy for bread [MRSCB] and Kathy's MRSCB?

Accepted Answer

A) Tim's MRSCB is greater than Kathy's MRSCB. 
B) Tim's MRSCB is smaller than Kathy's MRSCB. 
C) Tim's MRSCB is equal to Kathy's MRSCB. 
D) Tim's MRSCB is zero and Kathy's MRSCB is positive. 
A) Tim's MRSCB is greater than Kathy's MRSCB. 
B) Tim's MRSCB is smaller than Kathy's MRSCB. 
C) Tim's MRSCB is equal to Kathy's MRSCB. 
D) Tim's MRSCB is zero and Kathy's MRSCB is positive.

Question 3

Answer the following:
a)What is meant by Pareto efficiency? (b)Take an economy with a given level of national wealth.40% of the population own 60% of the wealth.The government redistributes the wealth among the population such that 50% of the population now own 50% of the wealth.Does this redistribution satisfy the Pareto criterion? Is the new distribution more equitable than the previous one? Why?

Accepted Answer

a)Vilfredo Pareto,the Italian economist,

Question 4

Which of the following is true of an efficient distribution of two goods among two individuals?

Accepted Answer

A) The efficient distribution of goods is represented by a point off the contract curve. 
B) The individuals' marginal rates of substitution are not equal at an efficient distribution of goods. 
C) If the distribution of two goods is efficient,one person can be made better off without harming the other. 
D) The point of tangency between two indifference curves shows an efficient distribution of goods. 
A) The efficient distribution of goods is represented by a point off the contract curve. 
B) The individuals' marginal rates of substitution are not equal at an efficient distribution of goods. 
C) If the distribution of two goods is efficient,one person can be made better off without harming the other. 
D) The point of tangency between two indifference curves shows an efficient distribution of goods.

Question 5

Any system of nonprice rationing could be inefficient because _____.

Accepted Answer

A) consumers are benefited at the producer's expense 
B) it would be virtually impossible to determine consumer preferences 
C) buyers and sellers act in self-interest which leads to inefficiency 
D) marginal values do not vary across consumers 
A) consumers are benefited at the producer's expense 
B) it would be virtually impossible to determine consumer preferences 
C) buyers and sellers act in self-interest which leads to inefficiency 
D) marginal values do not vary across consumers

Question 6

Explain why a competitive equilibrium produces an efficient allocation of goods.

Accepted Answer

Each consumer purchases a combination of

Question 7

Why is it difficult to compare two efficient points and decide which one is better?

Accepted Answer

A) The Pareto efficiency criterion cannot be applied to more than one allocation. 
B) Interpersonal comparisons cannot be made scientifically. 
C) The criteria for efficiency are subjective. 
D) There is no difference between various efficient allocations. 
A) The Pareto efficiency criterion cannot be applied to more than one allocation. 
B) Interpersonal comparisons cannot be made scientifically. 
C) The criteria for efficiency are subjective. 
D) There is no difference between various efficient allocations.

Question 8

Use the follwoing figure to answer the questions : Figure 6-2 shows an Edgeworth box with the preferences of Kathy and Tom toward bread and candy.  
-In Figure 6-2,a movement from D to A will:

Accepted Answer

A) benefit Tim but not affect Kathy. 
B) harm Tim but benefit Kathy. 
C) benefit Tim but harm Kathy. 
D) not affect Tim but benefit Kathy. 
A) benefit Tim but not affect Kathy. 
B) harm Tim but benefit Kathy. 
C) benefit Tim but harm Kathy. 
D) not affect Tim but benefit Kathy.

Question 9

Suppose,given their initial endowments of milk [M] and cookies [C],we know that: Ashley's marginal rate of substitution of cookies for milk [MRSCM] = 3M/1C;Bill's MRSCM = 8M/8C;and Carol's MRSCM = 5M/10C.Given this information we know that a mutually beneficial trade would involve Ashley selling ______ to Carol and Bill selling ______ to Ashley.

Accepted Answer

A) milk;cookies 
B) milk;milk 
C) cookies;milk 
D) cookies;cookies 
A) milk;cookies 
B) milk;milk 
C) cookies;milk 
D) cookies;cookies

Question 10

Two goods are allocated efficiently between consumers when _____.

Accepted Answer

A) the quantities of goods they consume are equal 
B) the marginal rates of substitution between the two goods are the same for both consumers 
C) there can be further exchanges that will make both consumers better off 
D) redistribution makes one consumer better off at the expense of the other 
A) the quantities of goods they consume are equal 
B) the marginal rates of substitution between the two goods are the same for both consumers 
C) there can be further exchanges that will make both consumers better off 
D) redistribution makes one consumer better off at the expense of the other

Question 11

Assume that Jeff and Jane both consume only two goods,burgers,and soft drinks.Jeff is willing to trade three soft drinks for one more burger,while Jane is willing to trade only two soft drinks for one more burger.Under these conditions:

Accepted Answer

A) Jeff should trade soft drinks for burgers. 
B) Jeff would be willing to trade,but Jane would not. 
C) Jeff should trade burgers for soft drinks. 
D) Jane would be willing to trade,but Jeff would not. 
A) Jeff should trade soft drinks for burgers. 
B) Jeff would be willing to trade,but Jane would not. 
C) Jeff should trade burgers for soft drinks. 
D) Jane would be willing to trade,but Jeff would not.

Question 12

Two consumers Jim and Pam both have opera tickets and movie tickets.They wish to exchange tickets with each other.Jim's utility function can be expressed as  And Pam's as  
If you take maximizing Pam's utility as the objective function there are how many constraints to be accounted for?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 13

Which of the following is true of price taking firms?

Accepted Answer

A) They cannot affect price by haggling 
B) They face an inelastic demand curve 
C) They are also price takers in the input market 
D) They cannot affect the market supply of a good 
A) They cannot affect price by haggling 
B) They face an inelastic demand curve 
C) They are also price takers in the input market 
D) They cannot affect the market supply of a good

Question 14

If Frank's and Jan's indifference curves intersect at the endowment point A,then:

Accepted Answer

A) A is on the contract curve. 
B) trade will make one of them better off while making the other one worse off. 
C) both indifference curves would cross the contract curve before they intersected again. 
D) A can be on either Frank's or Jan's contract curve but not both. 
A) A is on the contract curve. 
B) trade will make one of them better off while making the other one worse off. 
C) both indifference curves would cross the contract curve before they intersected again. 
D) A can be on either Frank's or Jan's contract curve but not both.

Question 15

How are prices of goods that you buy in an auction,at a garage sale,and at a drugstore determined? Is the price discovery process the same in all these markets?

Accepted Answer

The price discovery process is not the s

Question 16

A ration scheme using coupons could lead to an efficient outcome if _____.

Accepted Answer

A) consumers could trade coupons with each other 
B) the government allocates coupons among consumers 
C) the coupons were replaced with money 
D) the number of coupons in circulation was limited 
A) consumers could trade coupons with each other 
B) the government allocates coupons among consumers 
C) the coupons were replaced with money 
D) the number of coupons in circulation was limited

Question 17

Let the total quantities of two goods,apples and oranges,be 100 and 200 respectively.Jill has an initial allocation of 50 apples and 100 oranges and considers the two goods perfect 1-for-1 substitutes.Jack considers apples and oranges perfect 1-for-1 complements.Using an Edgeworth box,describe the set of allocations which improve economic efficiency.

Accepted Answer

@#IMG-DLM&_TB1826_00 The initial allocation is at

Question 18

A competitive equilibrium:

Accepted Answer

A) results in an efficient and equitable allocation. 
B) is characterized by equal marginal rates of substitution. 
C) occurs when resources are equally allocated between different producers. 
D) is not necessarily utility-maximizing. 
A) results in an efficient and equitable allocation. 
B) is characterized by equal marginal rates of substitution. 
C) occurs when resources are equally allocated between different producers. 
D) is not necessarily utility-maximizing.

Question 19

In an Edgeworth exchange box diagram,if the two consumers' indifference curves intersect at point A,then:

Accepted Answer

A) point A is on the contract curve. 
B) the consumers' MRSs' differ. 
C) voluntary exchange will not change the distribution of goods between consumers. 
D) the contract curve is convex to the origin. 
A) point A is on the contract curve. 
B) the consumers' MRSs' differ. 
C) voluntary exchange will not change the distribution of goods between consumers. 
D) the contract curve is convex to the origin.

Question 20

At their current distributions,Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 while Betty's is 2.Both Andrew and Betty could be made better off if:

Accepted Answer

A) they do not trade and keep their present allotment of hamburger and fish sticks. 
B) Andrew trades between two and six of his allotment of hamburgers with Betty for a fish stick. 
C) Andrew trades between two and six of his allotment of fish sticks with Betty for a hamburger. 
D) Andrew gives all of his hamburgers to Betty for all of her fish sticks. 
A) they do not trade and keep their present allotment of hamburger and fish sticks. 
B) Andrew trades between two and six of his allotment of hamburgers with Betty for a fish stick. 
C) Andrew trades between two and six of his allotment of fish sticks with Betty for a hamburger. 
D) Andrew gives all of his hamburgers to Betty for all of her fish sticks.

A secondary market for the resale of baseball tickets,known as scalping:

Which of the following is true of an efficient distribution of two goods among two individuals?

Any system of nonprice rationing could be inefficient because _____.

Explain why a competitive equilibrium produces an efficient allocation of goods.

Why is it difficult to compare two efficient points and decide which one is better?

Use the follwoing figure to answer the questions : Figure 6-2 shows an Edgeworth box with the preferences of Kathy and Tom toward bread and candy. -In Figure 6-2,a movement from D to A will:

Two goods are allocated efficiently between consumers when _____.

Assume that Jeff and Jane both consume only two goods,burgers,and soft drinks.Jeff is willing to trade three soft drinks for one more burger,while Jane is willing to trade only two soft drinks for one more burger.Under these conditions:

Two consumers Jim and Pam both have opera tickets and movie tickets.They wish to exchange tickets with each other.Jim's utility function can be expressed as And Pam's as If you take maximizing Pam's utility as the objective function there are how many constraints to be accounted for?

Which of the following is true of price taking firms?

If Frank's and Jan's indifference curves intersect at the endowment point A,then:

How are prices of goods that you buy in an auction,at a garage sale,and at a drugstore determined? Is the price discovery process the same in all these markets?

A ration scheme using coupons could lead to an efficient outcome if _____.

A competitive equilibrium:

In an Edgeworth exchange box diagram,if the two consumers' indifference curves intersect at point A,then:

At their current distributions,Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 while Betty's is 2.Both Andrew and Betty could be made better off if:

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Exam 6: Exchange, Efficiency, and Prices

A secondary market for the resale of baseball tickets,known as scalping:

Which of the following is true of an efficient distribution of two goods among two individuals?

Any system of nonprice rationing could be inefficient because _____.

Explain why a competitive equilibrium produces an efficient allocation of goods.

Why is it difficult to compare two efficient points and decide which one is better?

Use the follwoing figure to answer the questions : Figure 6-2 shows an Edgeworth box with the preferences of Kathy and Tom toward bread and candy. -In Figure 6-2,a movement from D to A will:

Two goods are allocated efficiently between consumers when _____.

Assume that Jeff and Jane both consume only two goods,burgers,and soft drinks.Jeff is willing to trade three soft drinks for one more burger,while Jane is willing to trade only two soft drinks for one more burger.Under these conditions:

Two consumers Jim and Pam both have opera tickets and movie tickets.They wish to exchange tickets with each other.Jim's utility function can be expressed as And Pam's as If you take maximizing Pam's utility as the objective function there are how many constraints to be accounted for?

Which of the following is true of price taking firms?

If Frank's and Jan's indifference curves intersect at the endowment point A,then:

How are prices of goods that you buy in an auction,at a garage sale,and at a drugstore determined? Is the price discovery process the same in all these markets?

A ration scheme using coupons could lead to an efficient outcome if _____.

A competitive equilibrium:

In an Edgeworth exchange box diagram,if the two consumers' indifference curves intersect at point A,then:

At their current distributions,Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 while Betty's is 2.Both Andrew and Betty could be made better off if:

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters