Question 1

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

Accepted Answer

A)  the marginal benefit from it exceeds the price. 
B)  the marginal benefit from it is zero. 
C)  his willingness to pay is less than the price. 
D)  there is no deadweight loss produced by his purchase of a cone. 
E)  None of the above answers is correct. 
A)  the marginal benefit from it exceeds the price. 
B)  the marginal benefit from it is zero. 
C)  his willingness to pay is less than the price. 
D)  there is no deadweight loss produced by his purchase of a cone. 
E)  None of the above answers is correct.

Question 2

Consumer surplus is the area

Accepted Answer

A)  below the demand curve and above the market price. 
B)  below the supply curve and above the market price. 
C)  above the demand curve and below the market price. 
D)  above the supply curve and below the market price. 
E)  below the demand curve and above the supply curve. 
A)  below the demand curve and above the market price. 
B)  below the supply curve and above the market price. 
C)  above the demand curve and below the market price. 
D)  above the supply curve and below the market price. 
E)  below the demand curve and above the supply curve.

Question 3

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 20,000th soda is

Accepted Answer

A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  more than $1.00. 
E)  None of the above answers is correct. 
A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  more than $1.00. 
E)  None of the above answers is correct.

Question 4

In the figure above,when 4,000 pizzas are produced,the marginal benefit of a pizza ________ its marginal cost,which means ________ pizza is being produced.

Accepted Answer

A)  exceeds; too little 
B)  exceeds; too much 
C)  is below; too much 
D)  is below; too little 
E)  equals ; the efficient quantity of 
A)  exceeds; too little 
B)  exceeds; too much 
C)  is below; too much 
D)  is below; too little 
E)  equals ; the efficient quantity of

Question 5

-In the above figure,what is the marginal cost of the 4th pizza?

Accepted Answer

A)  $0 
B)  $4 
C)  $9 
D)  $36 
E)  4 pizzas 
A)  $0 
B)  $4 
C)  $9 
D)  $36 
E)  4 pizzas

Question 6

Bill Gates is a founder of Microsoft and the world's richest individual.Suppose Microsoft sells more software and Mr.Gates acquires another billion dollars in wealth.Simultaneously,suppose a burglar whose income is well below average broke into Bill Gates' house and stole a million dollars' worth of antiques.Using the "it's not fair if the rules aren't fair" approach to fairness,is Mr.Gates' acquisition of additional wealth fair? Is the (poor)thief's acquisition fair?

Accepted Answer

In order for Mr.Gates to become richer,M

Question 7

The "invisible hand" refers to the notion that

Accepted Answer

A)  competitive markets send resources to their highest valued uses. 
B)  government intervention is necessary to ensure efficiency. 
C)  marginal benefit decreases as more is consumed. 
D)  marginal cost increases as more is produced. 
E)  no matter what allocation method is used, the resulting production is efficient. 
A)  competitive markets send resources to their highest valued uses. 
B)  government intervention is necessary to ensure efficiency. 
C)  marginal benefit decreases as more is consumed. 
D)  marginal cost increases as more is produced. 
E)  no matter what allocation method is used, the resulting production is efficient.

Question 8

-In the figure above,if the market price is $12,then the total consumer surplus is

Accepted Answer

A)  $12. 
B)  $10. 
C)  minimized. 
D)  $240. 
E)  $480. 
A)  $12. 
B)  $10. 
C)  minimized. 
D)  $240. 
E)  $480.

Question 9

When the price of a product exceeds the marginal cost of producing it,producers have a

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  consumer shortage. 
D)  producer shortage. 
E)  deadweight surplus. 
A)  consumer surplus. 
B)  producer surplus. 
C)  consumer shortage. 
D)  producer shortage. 
E)  deadweight surplus.

Question 10

If you split your dessert with your date,you are using a ________ allocation method.

Accepted Answer

A)  first-come, first-served 
B)  sharing equally 
C)  contest 
D)  personal characteristics 
E)  command 
A)  first-come, first-served 
B)  sharing equally 
C)  contest 
D)  personal characteristics 
E)  command

Question 11

When technology increases the supply of a good and lower prices increase the quantity demanded,

Accepted Answer

A)  the economy is reallocating resources to achieve an efficient allocation. 
B)  consumer surplus falls. 
C)  the invisible hand is unnecessary. 
D)  the marginal benefit of the good increases with the quantity produced. 
E)  the economy is no longer efficient because the quantity changes. 
A)  the economy is reallocating resources to achieve an efficient allocation. 
B)  consumer surplus falls. 
C)  the invisible hand is unnecessary. 
D)  the marginal benefit of the good increases with the quantity produced. 
E)  the economy is no longer efficient because the quantity changes.

Question 12

The figure above shows the market for pizza.
-In the figure above,if pizza production increases to 15,000 pizzas a day,then marginal benefit ________ marginal cost,and ________ occurs.

Accepted Answer

A)  exceeds; overproduction 
B)  exceeds; underproduction 
C)  is below; overproduction 
D)  is below; underproduction 
E)  exceeds; efficient production 
A)  exceeds; overproduction 
B)  exceeds; underproduction 
C)  is below; overproduction 
D)  is below; underproduction 
E)  exceeds; efficient production

Question 13

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

Accepted Answer

A person's share of the economic pie is

Question 14

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

Accepted Answer

A)  majority rule 
B)  market price 
C)  contest 
D)  personal characteristics 
E)  command 
A)  majority rule 
B)  market price 
C)  contest 
D)  personal characteristics 
E)  command

Question 15

Which of the following occurs when a market is efficient?

Accepted Answer

A)  Consumer surplus equals producer surplus. 
B)  Consumer surplus is as large as possible. 
C)  Producer surplus is as large as possible. 
D)  The sum of consumer surplus and producer surplus is maximized. 
E)  The marginal benefit exceeds the marginal cost by as much as possible. 
A)  Consumer surplus equals producer surplus. 
B)  Consumer surplus is as large as possible. 
C)  Producer surplus is as large as possible. 
D)  The sum of consumer surplus and producer surplus is maximized. 
E)  The marginal benefit exceeds the marginal cost by as much as possible.

Question 16

In order to efficiently allocate goods and services,we have to compare

Accepted Answer

A)  total cost to total benefit. 
B)  total cost to price. 
C)  marginal benefit to price. 
D)  marginal cost to marginal benefit. 
E)  price to marginal cost. 
A)  total cost to total benefit. 
B)  total cost to price. 
C)  marginal benefit to price. 
D)  marginal cost to marginal benefit. 
E)  price to marginal cost.

Question 17

Which of the following are the rules for finding the point of allocative efficiency?

Accepted Answer

A)  Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. 
B)  Produce on the PPF and then produce where marginal benefit equals marginal cost. 
C)  Produce on the PPF and then produce where marginal benefit and marginal cost are constant. 
D)  Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible. 
E)  Produce anywhere on the PPF. 
A)  Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. 
B)  Produce on the PPF and then produce where marginal benefit equals marginal cost. 
C)  Produce on the PPF and then produce where marginal benefit and marginal cost are constant. 
D)  Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible. 
E)  Produce anywhere on the PPF.

Question 18

What are the two ways demand curves can be interpreted?

Accepted Answer

Demand cur

Question 19

A monopoly is

Accepted Answer

A)  the single buyer of some good or service. 
B)  a firm that has control of a market because it is the only seller. 
C)  a firm that creates enormous external costs. 
D)  a firm that faces intense competition. 
E)  a cost of producing a good or service. 
A)  the single buyer of some good or service. 
B)  a firm that has control of a market because it is the only seller. 
C)  a firm that creates enormous external costs. 
D)  a firm that faces intense competition. 
E)  a cost of producing a good or service.

Question 20

If an economy is allocatively efficient,it must be producing

Accepted Answer

A)  beyond its production possibilities frontier. 
B)  inside its production possibilities frontier. 
C)  on its production possibilities frontier. 
D)  the goods and services that are the most expensive. 
E)  the goods and services that are the least expensive to produce. 
A)  beyond its production possibilities frontier. 
B)  inside its production possibilities frontier. 
C)  on its production possibilities frontier. 
D)  the goods and services that are the most expensive. 
E)  the goods and services that are the least expensive to produce.

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

Consumer surplus is the area

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 20,000th soda is

In the figure above,when 4,000 pizzas are produced,the marginal benefit of a pizza its marginal cost,which means pizza is being produced.

-In the above figure,what is the marginal cost of the 4th pizza?

The "invisible hand" refers to the notion that

-In the figure above,if the market price is $12,then the total consumer surplus is

When the price of a product exceeds the marginal cost of producing it,producers have a

If you split your dessert with your date,you are using a ________ allocation method.

When technology increases the supply of a good and lower prices increase the quantity demanded,

The figure above shows the market for pizza. -In the figure above,if pizza production increases to 15,000 pizzas a day,then marginal benefit marginal cost,and occurs.

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

Which of the following occurs when a market is efficient?

In order to efficiently allocate goods and services,we have to compare

Which of the following are the rules for finding the point of allocative efficiency?

What are the two ways demand curves can be interpreted?

A monopoly is

If an economy is allocatively efficient,it must be producing

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

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

Consumer surplus is the area

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 20,000th soda is

In the figure above,when 4,000 pizzas are produced,the marginal benefit of a pizza ________ its marginal cost,which means ________ pizza is being produced.

-In the above figure,what is the marginal cost of the 4th pizza?

The "invisible hand" refers to the notion that

-In the figure above,if the market price is $12,then the total consumer surplus is

When the price of a product exceeds the marginal cost of producing it,producers have a

If you split your dessert with your date,you are using a ________ allocation method.

When technology increases the supply of a good and lower prices increase the quantity demanded,

The figure above shows the market for pizza. -In the figure above,if pizza production increases to 15,000 pizzas a day,then marginal benefit ________ marginal cost,and ________ occurs.

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

Which of the following occurs when a market is efficient?

In order to efficiently allocate goods and services,we have to compare

Which of the following are the rules for finding the point of allocative efficiency?

What are the two ways demand curves can be interpreted?

A monopoly is

If an economy is allocatively efficient,it must be producing

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

In the figure above,when 4,000 pizzas are produced,the marginal benefit of a pizza its marginal cost,which means pizza is being produced.

The figure above shows the market for pizza. -In the figure above,if pizza production increases to 15,000 pizzas a day,then marginal benefit marginal cost,and occurs.