Question 1

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

Accepted Answer

A) True 
 B)False

Question 2

Figure 5-1   Figure 5-1 shows Arnold's demand curve for burritos.
-Refer to Figure 5-1.If the market price is $1.00,what is the maximum number of burritos that Arnold will buy?

Accepted Answer

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

Question 3

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

Accepted Answer

A) total 
B) unintended 
C) additional 
D) surplus 
A) total 
B) unintended 
C) additional 
D) surplus

Question 4

Figure 5-7   Figure 5-7 shows the market for beer.The government plans to impose a unit tax in this market.
-Refer to Figure 5-7.What is the size of the unit tax?

Accepted Answer

A) $2 
B) $5 
C) $7 
D) $12 
A) $2 
B) $5 
C) $7 
D) $12

Question 5

What is marginal benefit? Which curve is also referred to as a marginal benefit curve?

Accepted Answer

Marginal benefit is the additi

Question 6

Figure 5-3   Figure 5-3 shows the market for tiger shrimp.The market is initially in equilibrium at a price of $15 and a quantity of 80.Now suppose producers decide to cut output to 40S1U1B1 S1U1B0in order to raise the price to $18.
-Refer to Figure 5-3.What is the value of the deadweight loss at the equilibrium price of $15?

Accepted Answer

A) $0 
B) $40 
C) $60 
D) $100 
A) $0 
B) $40 
C) $60 
D) $100

Question 7

What do economists mean by an efficient tax?

Accepted Answer

A tax is efficient i

Question 8

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.

Accepted Answer

A) above;above 
B) above;below 
C) below;above 
D) below;below 
A) above;above 
B) above;below 
C) below;above 
D) below;below

Question 9

The excess burden of a tax is also a deadweight loss.

Accepted Answer

A) True 
 B)False

Question 10

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

Accepted Answer

A) demand 
B) supply 
C) production possibilities 
D) marginal cost 
A) demand 
B) supply 
C) production possibilities 
D) marginal cost

Question 11

What is the difference between scarcity and a shortage?

Accepted Answer

Scarcity is a situation in which unlimit

Question 12

Table 5-1
  
-Refer to Table 5-1.The table above lists the highest prices three consumers,Tom,Dick and Harriet,are willing to pay for a short-sleeved polo shirt.If the price of one of the shirts is $28 dollars,

Accepted Answer

A) Tom will buy two shirts,Dick will buy one shirt and Harriet will buy no shirts. 
B) Tom will receive $12 of consumer surplus from buying one shirt. 
C) Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each.Harriet will buy no shirts. 
D) Harriet will receive $25 of consumer surplus since she will buy no shirts. 
A) Tom will buy two shirts,Dick will buy one shirt and Harriet will buy no shirts. 
B) Tom will receive $12 of consumer surplus from buying one shirt. 
C) Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each.Harriet will buy no shirts. 
D) Harriet will receive $25 of consumer surplus since she will buy no shirts.

Question 13

The minimum wage is an example of a price ceiling.

Accepted Answer

A) True 
 B)False

Question 14

Table 5-2
  
-Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one of the tickets is $18,

Accepted Answer

A) Anya and Basil will each buy two tickets. 
B) Basil will receive $2 of consumer surplus from buying one ticket. 
C) Anya and Basil receive a total of $26 of consumer surplus from buying one ticket each.No one else will buy a ticket. 
D) Celeste,Dralon,and Esther will receive a total of $34 of consumer surplus since they will buy no tickets. 
A) Anya and Basil will each buy two tickets. 
B) Basil will receive $2 of consumer surplus from buying one ticket. 
C) Anya and Basil receive a total of $26 of consumer surplus from buying one ticket each.No one else will buy a ticket. 
D) Celeste,Dralon,and Esther will receive a total of $34 of consumer surplus since they will buy no tickets.

Question 15

Figure 5-1   Figure 5-1 shows Arnold's demand curve for burritos.
-Refer to Figure 5-1.Arnold's marginal benefit from consuming the second burrito is

Accepted Answer

A) $1.00. 
B) $1.50. 
C) $2.00. 
D) $4.50. 
A) $1.00. 
B) $1.50. 
C) $2.00. 
D) $4.50.

Question 16

Table 5-3
  
-Refer to Table 5-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specialises in producing fancy dress costumes.If the market price of cowboy hats is $50,producer surplus is

Accepted Answer

A) $0. 
B) $4. 
C) $62. 
D) $138. 
A) $0. 
B) $4. 
C) $62. 
D) $138.

Question 17

The graph below represents the market for walnuts.Identify the values of the marginal benefit and the marginal cost at the output levels of 2000 pounds,4000 pounds and 6000 pounds.At each of these output levels,state whether output is inefficiently high,inefficiently low,or economically efficient.

Accepted Answer

Output level = 2000 lbs: marginal benefi

Question 18

Suppliers will be willing to supply a product only if

Accepted Answer

A) the price received is less than the additional cost of producing the product. 
B) the price received is at least equal to the additional cost of producing the product. 
C) the price is higher than the average cost of producing the product. 
D) the price received is at least double the additional cost of producing the product. 
A) the price received is less than the additional cost of producing the product. 
B) the price received is at least equal to the additional cost of producing the product. 
C) the price is higher than the average cost of producing the product. 
D) the price received is at least double the additional cost of producing the product.

Question 19

Companies in the sharing economy have the potential to lower the equilibrium price in their market,and by doing so increase efficiency.This would have a tendency to

Accepted Answer

A) increase producer surplus and increase deadweight loss. 
B) increase consumer surplus and decrease deadweight loss. 
C) decrease consumer surplus and decrease producer surplus. 
D) maximise consumer surplus and minimise producer surplus. 
A) increase producer surplus and increase deadweight loss. 
B) increase consumer surplus and decrease deadweight loss. 
C) decrease consumer surplus and decrease producer surplus. 
D) maximise consumer surplus and minimise producer surplus.

Question 20

Figure 5-4  
-Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following is true?

Accepted Answer

A) If the price of pecans is $3,the output will be economically efficient but there will be a deadweight loss. 
B) If the price of pecans is $9,consumers will purchase more than the economically efficient output. 
C) Both 4000 pounds and 12 000 pounds are economically inefficient rates of output. 
D) If the price of pecans is $3,producers will sell 12 000 pounds of pecans,but this output will be economically inefficient. 
A) If the price of pecans is $3,the output will be economically efficient but there will be a deadweight loss. 
B) If the price of pecans is $9,consumers will purchase more than the economically efficient output. 
C) Both 4000 pounds and 12 000 pounds are economically inefficient rates of output. 
D) If the price of pecans is $3,producers will sell 12 000 pounds of pecans,but this output will be economically inefficient.

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

Figure 5-1 Figure 5-1 shows Arnold's demand curve for burritos. -Refer to Figure 5-1.If the market price is $1.00,what is the maximum number of burritos that Arnold will buy?

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

Figure 5-7 Figure 5-7 shows the market for beer.The government plans to impose a unit tax in this market. -Refer to Figure 5-7.What is the size of the unit tax?

What is marginal benefit? Which curve is also referred to as a marginal benefit curve?

What do economists mean by an efficient tax?

The area the market supply curve and the market price is equal to the total amount of producer surplus in a market.

The excess burden of a tax is also a deadweight loss.

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

What is the difference between scarcity and a shortage?

Table 5-1 -Refer to Table 5-1.The table above lists the highest prices three consumers,Tom,Dick and Harriet,are willing to pay for a short-sleeved polo shirt.If the price of one of the shirts is $28 dollars,

The minimum wage is an example of a price ceiling.

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one of the tickets is $18,

Figure 5-1 Figure 5-1 shows Arnold's demand curve for burritos. -Refer to Figure 5-1.Arnold's marginal benefit from consuming the second burrito is

Table 5-3 -Refer to Table 5-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specialises in producing fancy dress costumes.If the market price of cowboy hats is $50,producer surplus is

The graph below represents the market for walnuts.Identify the values of the marginal benefit and the marginal cost at the output levels of 2000 pounds,4000 pounds and 6000 pounds.At each of these output levels,state whether output is inefficiently high,inefficiently low,or economically efficient.

Suppliers will be willing to supply a product only if

Companies in the sharing economy have the potential to lower the equilibrium price in their market,and by doing so increase efficiency.This would have a tendency to

Figure 5-4 -Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following is true?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 5: Economic Efficiency, Government Price Setting and Taxes

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

Figure 5-1 Figure 5-1 shows Arnold's demand curve for burritos. -Refer to Figure 5-1.If the market price is $1.00,what is the maximum number of burritos that Arnold will buy?

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

Figure 5-7 Figure 5-7 shows the market for beer.The government plans to impose a unit tax in this market. -Refer to Figure 5-7.What is the size of the unit tax?

What is marginal benefit? Which curve is also referred to as a marginal benefit curve?

What do economists mean by an efficient tax?

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.

The excess burden of a tax is also a deadweight loss.

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

What is the difference between scarcity and a shortage?

Table 5-1 -Refer to Table 5-1.The table above lists the highest prices three consumers,Tom,Dick and Harriet,are willing to pay for a short-sleeved polo shirt.If the price of one of the shirts is $28 dollars,

The minimum wage is an example of a price ceiling.

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one of the tickets is $18,

Figure 5-1 Figure 5-1 shows Arnold's demand curve for burritos. -Refer to Figure 5-1.Arnold's marginal benefit from consuming the second burrito is

Table 5-3 -Refer to Table 5-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specialises in producing fancy dress costumes.If the market price of cowboy hats is $50,producer surplus is

The graph below represents the market for walnuts.Identify the values of the marginal benefit and the marginal cost at the output levels of 2000 pounds,4000 pounds and 6000 pounds.At each of these output levels,state whether output is inefficiently high,inefficiently low,or economically efficient.

Suppliers will be willing to supply a product only if

Companies in the sharing economy have the potential to lower the equilibrium price in their market,and by doing so increase efficiency.This would have a tendency to

Figure 5-4 -Refer to Figure 5-4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following is true?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

The area the market supply curve and the market price is equal to the total amount of producer surplus in a market.