Question 1

-In the above figure,the market is at its equilibrium.Area A + area B is equal to

Accepted Answer

A)  consumer surplus. 
B)  total revenue. 
C)  total surplus. 
D)  marginal benefit. 
E)  producer surplus. 
A)  consumer surplus. 
B)  total revenue. 
C)  total surplus. 
D)  marginal benefit. 
E)  producer surplus.

Question 2

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total consumer surplus equals

Accepted Answer

A)  $120. 
B)  $90. 
C)  $60. 
D)  $0. 
E)  None of the above answers is correct. 
A)  $120. 
B)  $90. 
C)  $60. 
D)  $0. 
E)  None of the above answers is correct.

Question 3

-In the figure above,suppose the market is at equilibrium.Then area A is the

Accepted Answer

A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss. 
A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss.

Question 4

When a product benefits people other than the buyer of the product,the product is said to have

Accepted Answer

A)  an external cost. 
B)  an excludable cost. 
C)  an external benefit. 
D)  an excludable benefit. 
E)  a subsidized benefit. 
A)  an external cost. 
B)  an excludable cost. 
C)  an external benefit. 
D)  an excludable benefit. 
E)  a subsidized benefit.

Question 5

The producer surplus on a unit of a good is

Accepted Answer

A)  equal to the marginal benefit from the good minus its price. 
B)  equal to the price of the good minus the marginal cost of producing it. 
C)  always equal to consumer surplus. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct. 
A)  equal to the marginal benefit from the good minus its price. 
B)  equal to the price of the good minus the marginal cost of producing it. 
C)  always equal to consumer surplus. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct.

Question 6

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.For Kaley and Scott,allocative efficiency is achieved at what point?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  Either point A or point D 
A)  A 
B)  B 
C)  C 
D)  D 
E)  Either point A or point D

Question 7

The "fair rules" view of fairness is based on

Accepted Answer

A)  income transfers from the rich to the poor. 
B)  property rights and voluntary exchange. 
C)  utilitarianism. 
D)  the big tradeoff. 
E)  allocating resources using majority rule. 
A)  income transfers from the rich to the poor. 
B)  property rights and voluntary exchange. 
C)  utilitarianism. 
D)  the big tradeoff. 
E)  allocating resources using majority rule.

Question 8

Consumers' total benefit from consuming a good is equal to the

Accepted Answer

A)  total amount spent on the good. 
B)  consumer surplus on the quantity purchased. 
C)  consumer surplus plus the total amount spent on the good. 
D)  consumer surplus minus the total amount spent on the good. 
E)  total amount spent on the good divided by the number of units purchased. 
A)  total amount spent on the good. 
B)  consumer surplus on the quantity purchased. 
C)  consumer surplus plus the total amount spent on the good. 
D)  consumer surplus minus the total amount spent on the good. 
E)  total amount spent on the good divided by the number of units purchased.

Question 9

Why is the demand curve the same as the marginal benefit curve?

Accepted Answer

The demand curve for a good tells us for

Question 10

-In the above figure,if the market is in equilibrium,area A + area B + area C equals

Accepted Answer

A)  total surplus. 
B)  consumer surplus. 
C)  deadweight loss. 
D)  producer surplus. 
E)  total revenue. 
A)  total surplus. 
B)  consumer surplus. 
C)  deadweight loss. 
D)  producer surplus. 
E)  total revenue.

Question 11

-The figure above shows the market for brooms.Which of the following could lead to the production of fewer than 600 brooms?

Accepted Answer

A)  a monopoly 
B)  a deadweight loss 
C)  subsidies 
D)  an external cost 
E)  a big tradeoff 
A)  a monopoly 
B)  a deadweight loss 
C)  subsidies 
D)  an external cost 
E)  a big tradeoff

Question 12

The "equality of opportunity" idea of fairness claims

Accepted Answer

A)  a society should make the poorest as well off as possible. 
B)  the results and the rules should both be fair. 
C)  it's not fair if the rules aren't fair. 
D)  private property can be transferred under government order. 
E)  only a first-come, first-served system of allocating resources is fair. 
A)  a society should make the poorest as well off as possible. 
B)  the results and the rules should both be fair. 
C)  it's not fair if the rules aren't fair. 
D)  private property can be transferred under government order. 
E)  only a first-come, first-served system of allocating resources is fair.

Question 13

-In the figure above,suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

Accepted Answer

A)  A 
B)  B 
C)  A + B 
D)  B - A 
E)  B ÷ A 
A)  A 
B)  B 
C)  A + B 
D)  B - A 
E)  B ÷ A

Question 14

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

Accepted Answer

A)  $15.00. 
B)  $26.25. 
C)  $11.25. 
D)  $0. 
E)  None of the above answers is correct. 
A)  $15.00. 
B)  $26.25. 
C)  $11.25. 
D)  $0. 
E)  None of the above answers is correct.

Question 15

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

Question 16

Which of the following leads to a deadweight loss?
i.competition
ii.taxes
iii.consumer surplus
iv.monopoly

Accepted Answer

A)  ii only 
B)  iii and iv 
C)  i and ii 
D)  ii and iv 
E)  i, ii, and iii 
A)  ii only 
B)  iii and iv 
C)  i and ii 
D)  ii and iv 
E)  i, ii, and iii

Question 17

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above,the minimum price that must be offered for the 5,000th pizza a day to be produced is

Accepted Answer

A)  $6. 
B)  $10. 
C)  $8. 
D)  $2. 
E)  $4. 
A)  $6. 
B)  $10. 
C)  $8. 
D)  $2. 
E)  $4.

Question 18

Jenn is willing to pay $75 for a purse and the purse's price is $60.What is Jenn's consumer surplus on this purse?

Accepted Answer

The consumer surplus equals the differen

Question 19

-The figure above shows the supply curve for pizzas.
a.What is the marginal cost of the 20th pizza?
b.What is the minimum supply price of the 20th pizza?
c.If the price is $6 per pizza,what is the producer surplus on the 20th pizza?
d.If the price is $6 per pizza,what is the producer surplus for the total quantity of pizzas produced?
e.If the price is $8 per pizza,what is the producer surplus for the total quantity of pizzas produced?
f.If the price is $10 per pizza,what is the producer surplus for the total quantity of pizzas produced?

Accepted Answer

a.The marginal cost of the 20th pizza is

Question 20

When society produces the combination of goods and services on the PPF that it values the most highly,society has

Accepted Answer

A)  achieved only production efficiency and definitely not allocative efficiency. 
B)  achieved only allocative efficiency definitely not production efficiency. 
C)  achieved both production efficiency and allocative efficiency. 
D)  achieved a free lunch. 
E)  perhaps achieved production efficiency and has perhaps achieved allocative efficiency. 
A)  achieved only production efficiency and definitely not allocative efficiency. 
B)  achieved only allocative efficiency definitely not production efficiency. 
C)  achieved both production efficiency and allocative efficiency. 
D)  achieved a free lunch. 
E)  perhaps achieved production efficiency and has perhaps achieved allocative efficiency.

-In the above figure,the market is at its equilibrium.Area A + area B is equal to

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total consumer surplus equals

-In the figure above,suppose the market is at equilibrium.Then area A is the

When a product benefits people other than the buyer of the product,the product is said to have

The producer surplus on a unit of a good is

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.For Kaley and Scott,allocative efficiency is achieved at what point?

The "fair rules" view of fairness is based on

Consumers' total benefit from consuming a good is equal to the

Why is the demand curve the same as the marginal benefit curve?

-In the above figure,if the market is in equilibrium,area A + area B + area C equals

-The figure above shows the market for brooms.Which of the following could lead to the production of fewer than 600 brooms?

The "equality of opportunity" idea of fairness claims

-In the figure above,suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

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

Which of the following leads to a deadweight loss? i.competition ii.taxes iii.consumer surplus iv.monopoly

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the minimum price that must be offered for the 5,000th pizza a day to be produced is

Jenn is willing to pay $75 for a purse and the purse's price is $60.What is Jenn's consumer surplus on this purse?

When society produces the combination of goods and services on the PPF that it values the most highly,society has

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 6: Efficiency and Fairness of Markets

-In the above figure,the market is at its equilibrium.Area A + area B is equal to

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total consumer surplus equals

-In the figure above,suppose the market is at equilibrium.Then area A is the

When a product benefits people other than the buyer of the product,the product is said to have

The producer surplus on a unit of a good is

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.For Kaley and Scott,allocative efficiency is achieved at what point?

The "fair rules" view of fairness is based on

Consumers' total benefit from consuming a good is equal to the

Why is the demand curve the same as the marginal benefit curve?

-In the above figure,if the market is in equilibrium,area A + area B + area C equals

-The figure above shows the market for brooms.Which of the following could lead to the production of fewer than 600 brooms?

The "equality of opportunity" idea of fairness claims

-In the figure above,suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

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

Which of the following leads to a deadweight loss? i.competition ii.taxes iii.consumer surplus iv.monopoly

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the minimum price that must be offered for the 5,000th pizza a day to be produced is

Jenn is willing to pay $75 for a purse and the purse's price is $60.What is Jenn's consumer surplus on this purse?

When society produces the combination of goods and services on the PPF that it values the most highly,society has

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters