Question 1

Resource use is allocative efficient

Accepted Answer

A)  when it is not possible to produce more of one good. 
B)  when we produce goods and services that we value most highly. 
C)  when most resources are fully employed. 
D)  at any point on the PPF. 
E)  at all points either on or within the PPF because all these production points are attainable. 
A)  when it is not possible to produce more of one good. 
B)  when we produce goods and services that we value most highly. 
C)  when most resources are fully employed. 
D)  at any point on the PPF. 
E)  at all points either on or within the PPF because all these production points are attainable.

Question 2

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of 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 3

What is consumer surplus?

Accepted Answer

Consumer surplus equals the difference b

Question 4

Cost

Accepted Answer

A)  is what the buyer pays to get the good. 
B)  is always equal to the marginal benefit for every unit of a good produced. 
C)  is what the seller must give up to produce the good. 
D)  is greater than market price, which results in a profit for firms. 
E)  means the same thing as price. 
A)  is what the buyer pays to get the good. 
B)  is always equal to the marginal benefit for every unit of a good produced. 
C)  is what the seller must give up to produce the good. 
D)  is greater than market price, which results in a profit for firms. 
E)  means the same thing as price.

Question 5

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

Accepted Answer

A)  more than $100. 
B)  between $100 and $80. 
C)  between $79 and $51. 
D)  less than $51. 
E)  some amount that cannot be calculated without additional information. 
A)  more than $100. 
B)  between $100 and $80. 
C)  between $79 and $51. 
D)  less than $51. 
E)  some amount that cannot be calculated without additional information.

Question 6

When allocative efficiency occurs,

Accepted Answer

A)  an economy produces the goods and services most highly valued. 
B)  marginal benefit exceeds marginal cost by some amount. 
C)  technology must be increasing. 
D)  we can simultaneously produce more of all goods. 
E)  marginal benefit exceeds marginal cost by as much as possible. 
A)  an economy produces the goods and services most highly valued. 
B)  marginal benefit exceeds marginal cost by some amount. 
C)  technology must be increasing. 
D)  we can simultaneously produce more of all goods. 
E)  marginal benefit exceeds marginal cost by as much as possible.

Question 7

-The figure shows the demand curve for hotel rooms at a local resort.
a.If the hotel charges $120 per night,how many rooms will they rent?
b.If there are only 40 rooms available,how much are customers willing to pay for a room?
c.If 60 rooms are available,how much are customers willing to pay?
d.What do the dollars in your answer to part (c)represent?

Accepted Answer

a.At $120 a night,the hotel will rent 20

Question 8

-The diagram above depicts the demand for,and market price of,buckets of raw oysters in Orlando.
a.What is the consumer surplus of the person who buys the 100th bucket of oysters?
b.What is the consumer surplus of the person who buys the 200th bucket of oysters?
c.What is the consumer surplus of the person who buys the 300th bucket of oysters?
d.What is the total consumer surplus from all the oysters consumed in the market?

Accepted Answer

a.The consumer surplus of the person who

Question 9

-The figure above represents the competitive market for slices of key lime pie.If the production is 80 slices per day,the cost of the 80th slice is

Accepted Answer

A)  less than anyone is willing to pay for it. 
B)  more than anyone is willing to pay for it. 
C)  equal to what someone is willing to pay for it. 
D)  indeterminant. 
E)  equal to the deadweight loss from the 80th slice. 
A)  less than anyone is willing to pay for it. 
B)  more than anyone is willing to pay for it. 
C)  equal to what someone is willing to pay for it. 
D)  indeterminant. 
E)  equal to the deadweight loss from the 80th slice.

Question 10

Deadweight loss and market failure are created when a market produces

Accepted Answer

A)  either more or less than the efficient quantity. 
B)  more than the efficient quantity but not when less than the efficient quantity is produced. 
C)  less than the efficient quantity but not when more than the efficient quantity is produced. 
D)  the efficient quantity. 
E)  None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity. 
A)  either more or less than the efficient quantity. 
B)  more than the efficient quantity but not when less than the efficient quantity is produced. 
C)  less than the efficient quantity but not when more than the efficient quantity is produced. 
D)  the efficient quantity. 
E)  None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity.

Question 11

-The figure above shows the market for pants.If the efficient quantity is produced,

Accepted Answer

A)  there will be no consumer surplus. 
B)  the sum of consumer and producer surplus will be maximized. 
C)  a small deadweight loss will result. 
D)  the sum of consumer and producer surplus will be minimized. 
E)  the consumer surplus on all the pants must equal the producer surplus on all the pants. 
A)  there will be no consumer surplus. 
B)  the sum of consumer and producer surplus will be maximized. 
C)  a small deadweight loss will result. 
D)  the sum of consumer and producer surplus will be minimized. 
E)  the consumer surplus on all the pants must equal the producer surplus on all the pants.

Question 12

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

Accepted Answer

A)  more than it costs to produce the slice. 
B)  less than it costs to produce the slice. 
C)  an amount equal to the cost of producing the slice. 
D)  an amount equal to the cost of producing all 40 slices. 
E)  an amount that is not comparable to the cost of producing the slice. 
A)  more than it costs to produce the slice. 
B)  less than it costs to produce the slice. 
C)  an amount equal to the cost of producing the slice. 
D)  an amount equal to the cost of producing all 40 slices. 
E)  an amount that is not comparable to the cost of producing the slice.

Question 13

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

Accepted Answer

A)  $5.50. 
B)  $10.00. 
C)  $22.50. 
D)  $45.00. 
E)  3 dolls. 
A)  $5.50. 
B)  $10.00. 
C)  $22.50. 
D)  $45.00. 
E)  3 dolls.

Question 14

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is ________,and the method of allocation for determining the winner of the race is ________.

Accepted Answer

A)  lottery; contest 
B)  contest; lottery 
C)  first-come, first-served; lottery 
D)  lottery; first-come, first-served 
E)  contest; command 
A)  lottery; contest 
B)  contest; lottery 
C)  first-come, first-served; lottery 
D)  lottery; first-come, first-served 
E)  contest; command

Question 15

When underproduction occurs,

Accepted Answer

A)  producers gain more surplus at the expense of consumers. 
B)  marginal cost is greater than marginal benefit. 
C)  consumer surplus increases to a harmful amount. 
D)  there is a deadweight loss that is borne by the entire society. 
E)  the deadweight loss harms only consumers. 
A)  producers gain more surplus at the expense of consumers. 
B)  marginal cost is greater than marginal benefit. 
C)  consumer surplus increases to a harmful amount. 
D)  there is a deadweight loss that is borne by the entire society. 
E)  the deadweight loss harms only consumers.

Question 16

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A)  exceeds the marginal cost by as much as possible. 
B)  exceeds the marginal cost, but not by as much as possible. 
C)  is less than the marginal cost. 
D)  equals the marginal cost. 
E)  equals zero. 
A)  exceeds the marginal cost by as much as possible. 
B)  exceeds the marginal cost, but not by as much as possible. 
C)  is less than the marginal cost. 
D)  equals the marginal cost. 
E)  equals zero.

Question 17

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

Accepted Answer

A)  market price 
B)  sharing equally 
C)  personal characteristics 
D)  first-come, first-served 
E)  force 
A)  market price 
B)  sharing equally 
C)  personal characteristics 
D)  first-come, first-served 
E)  force

Question 18

When a market is efficient,the

Accepted Answer

A)  sum of consumer surplus and producer surplus is maximized. 
B)  deadweight gain is maximized. 
C)  quantity produced is maximized. 
D)  marginal benefit of the last unit produced exceeds the marginal cost by as much as possible. 
E)  total benefit equals the total cost. 
A)  sum of consumer surplus and producer surplus is maximized. 
B)  deadweight gain is maximized. 
C)  quantity produced is maximized. 
D)  marginal benefit of the last unit produced exceeds the marginal cost by as much as possible. 
E)  total benefit equals the total cost.

Question 19

When society must decrease the production of something in order to produce more of another good or service,society has necessarily achieved

Accepted Answer

A)  only production efficiency. 
B)  only allocative efficiency. 
C)  both production efficiency and allocative efficiency. 
D)  a free lunch. 
E)  the maximum opportunity cost.. 
A)  only production efficiency. 
B)  only allocative efficiency. 
C)  both production efficiency and allocative efficiency. 
D)  a free lunch. 
E)  the maximum opportunity cost..

Question 20

Marginal cost equals

Accepted Answer

A)  the profitability derived from producing another unit of output. 
B)  all the opportunity cost of producing the amount of output. 
C)  or exceeds the marginal benefit. 
D)  productive efficiency. 
E)  the opportunity cost of producing one more unit of output. 
A)  the profitability derived from producing another unit of output. 
B)  all the opportunity cost of producing the amount of output. 
C)  or exceeds the marginal benefit. 
D)  productive efficiency. 
E)  the opportunity cost of producing one more unit of output.

Resource use is allocative efficient

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

What is consumer surplus?

Cost

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

When allocative efficiency occurs,

-The figure above represents the competitive market for slices of key lime pie.If the production is 80 slices per day,the cost of the 80th slice is

Deadweight loss and market failure are created when a market produces

-The figure above shows the market for pants.If the efficient quantity is produced,

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is ,and the method of allocation for determining the winner of the race is .

When underproduction occurs,

Allocative efficiency is achieved when the marginal benefit of a good

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

When a market is efficient,the

When society must decrease the production of something in order to produce more of another good or service,society has necessarily achieved

Marginal cost equals

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

Resource use is allocative efficient

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

What is consumer surplus?

Cost

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

When allocative efficiency occurs,

-The figure above represents the competitive market for slices of key lime pie.If the production is 80 slices per day,the cost of the 80th slice is

Deadweight loss and market failure are created when a market produces

-The figure above shows the market for pants.If the efficient quantity is produced,

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is ________,and the method of allocation for determining the winner of the race is ________.

When underproduction occurs,

Allocative efficiency is achieved when the marginal benefit of a good

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

When a market is efficient,the

When society must decrease the production of something in order to produce more of another good or service,society has necessarily achieved

Marginal cost equals

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

The Ironman Hawaii randomly draws a few hundred slots from thousands of applicants for the race.The method of allocation for the opportunity to participate in the race is ,and the method of allocation for determining the winner of the race is .