Exam 15: Economic Efficiency and the Competitive Ideal

A) exceeds the market price
B) is measured by the area under the market demand curve
C) is measured by the area beneath the market price
D) is a Pareto improvement
E) is called market consumer surplus

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A) zero in perfect competition
B) zero in monopoly
C) greater than the buyer's consumer surplus on that unit
D) an example of a side payment
E) the difference between the price the seller receives and the cost of producing that unit.

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A) there are no barriers to entry
B) there are no barriers to entry and all of the goods are perfect substitutes
C) each of the firms in the industry are profit maximizers
D) it is the most fair
E) most buyers in the market have the same level of income

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A) the value to some individual of the tenth unit of output is $40
B) the economy is efficient
C) selling an 11th unit would be a Pareto improvement
D) a side payment of $40 is needed to ensure that the good is produced
E) the market must be perfectly competitive

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A) at any quantity shows the value - to someone - of the last unit of the good consumed
B) shows the market value of a good or service
C) increases as more of a good or service is consumed
D) shows the cost of producing each unit of a good or service
E) measures the side payment necessary to achieve economic efficiency

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A) The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would decrease
B) The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would increase
C) The consumer surplus,the producer surplus and the dead weight loss would all decrease
D) The consumer surplus,the producer surplus and the dead weight loss would all increase
E) The consumer surplus would decrease,the producer surplus would increase and the dead weight loss would decrease

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A) is achieved whenever the marginal cost of producing the last unit exceeds its value to some consumer
B) is achieved whenever the value of the last unit to some consumer exceeds the minimum price its producer would be willing to accept for it
C) will not be produced unless a side payment is made
D) is the quantity at which the market supply and demand curves intersect
E) is usually a fair quantity

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A) leads to the same result as if the market were monopolized
B) results in a welfare loss
C) is effective only if it is set above the equilibrium price
D) may result from collusion among the firms selling in that market
E) may result from collusion among the consumers buying in that market

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A) the equilibrium quantity provides the maximum possible benefit to buyers
B) the equilibrium quantity provides the maximum possible benefit to buyers and sellers combined
C) total (producer + consumer) surplus is equal to price x quantity.
D) an additional unit,if produced,would produce a benefit that exceeds its cost of production
E) an additional unit could be produced at a cost to some producer that is less than the benefit to some consumer

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A) the more of an excise tax is that is collected by sellers
B) the more of an excise tax that is paid by buyers
C) the more an excise that is paid by sellers
D) the more elastic the supply of that good
E) the smaller the burden of a tax on that good

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A) A
B) B
C) C
D) D
E) E

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A) is the process by which buyers pass a tax onto sellers
B) is the process that causes some of a tax collected by one side of a market to be paid by the other side
C) is the process of avoiding taxes and lowering a tax burden
D) is a way of avoiding payment of a tax
E) is illegal in the United States

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A) automatically in a capitalist economy
B) when every possible Pareto improvement is exploited
C) when all markets are monopolized
D) if income is fairly distributed
E) whenever a voluntary transaction takes place

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