Question 1

The French term for "let it be" is:

Accepted Answer

A)   ceteris paribus.
B)   laissez-faire.
C)   savoir faire.
D)   laissez passer.

Question 2

The invisible hand is the process describing how resources are allocated efficiently through individual decisions made in markets.

Accepted Answer

A) True 
 B)False

Question 3

At times,there are conflicts between market outcomes that are efficient and outcomes that society deems fair.

Accepted Answer

A) True 
 B)False

Question 4

If a price floor is set above the equilibrium price in the market,consumer surplus will be:

Accepted Answer

A)   higher than it would be without the price floor.
B)   lower than it would be without the price floor.
C)   the same as it would be without the price floor.
D)   impossible to calculate.

Question 5

Suppose that the price of a good is $6 and equilibrium price is $8.Compared to market equilibrium:

Accepted Answer

A)   consumer surplus is decreased and deadweight loss is increased.
B)   consumer surplus is increased and deadweight loss is decreased.
C)   producer surplus is decreased and deadweight loss is increased.
D)   producer surplus is decreased and deadweight loss is decreased.

Question 6

How large is deadweight loss in equilibrium?

Accepted Answer

A)   zero
B)   the dollar value of producer surplus minus consumer surplus
C)   the dollar value of consumer surplus minus producer surplus
D)   the dollar value of producer surplus plus consumer surplus

Question 7

Use the following to answer questions 
Figure: Determining Surplus 3 
-(Figure: Determining Surplus 3) In the graph,how much is producer surplus?

Accepted Answer

A)   $60
B)   $140
C)   $200
D)   $280

Question 8

Use the following to answer questions 
Figure: Determining Total Surplus 
-(Figure: Determining Total Surplus) In the graph,total producer surplus is shown by area:

Accepted Answer

A)   acdf.
B)   ace.
C)   bce.
D)   abe.

Question 9

Use the following to answer questions 
Figure: Determining Surplus and Loss 
-(Figure: Determining Surplus and Loss)In the graph,if government sets a price of $12,there is a shortage of 40.

Accepted Answer

A) True 
 B)False

Question 10

When market failure occurs,it often creates an economic:

Accepted Answer

A)   incentive for income equity.
B)   role for government.
C)   incentive for more information.
D)   incentive for more competition.

Question 11

Use the following to answer questions 
Figure: Understanding Price Ceilings and Floors 
-(Figure: Understanding Price Ceilings and Floors)In the graph,a price of $25 would allow for an effective price ceiling.

Accepted Answer

A) True 
 B)False

Question 12

Use the following to answer questions 
Figure: Determining Surplus and Loss 
-(Figure: Determining Surplus and Loss)In the graph,a price of $ 5 would allow for an effective price floor.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer questions 
Figure: Determining Surplus 3 
-(Figure: Determining Surplus 3) In the graph,how much is consumer surplus?

Accepted Answer

A)   $6
B)   $14
C)   $20
D)   $60

Question 14

Implementing a price ceiling can cause:

Accepted Answer

A)   a shortage.
B)   poverty.
C)   a surplus.
D)   scarcity.

Question 15

Suppose that the price of a good is $22 and equilibrium price is $25.Compared to market equilibrium:

Accepted Answer

A)   consumer surplus is decreased and deadweight loss is increased.
B)   consumer surplus is increased and deadweight loss is decreased.
C)   producer surplus is decreased and deadweight loss is increased.
D)   producer surplus is decreased and deadweight loss is decreased.

Question 16

Which of the following activities typically generates an external cost?

Accepted Answer

A)   flu vaccine
B)   traffic congestion
C)   public education
D)   scientific research

Question 17

Mike really enjoys Bitter Sweet coffee and is willing to pay $10 per cup.The retail price is $3.

Accepted Answer

A)   Mike's consumer surplus is $10 per cup.
B)   Mike has a consumer surplus of $7 per cup.
C)   The seller can raise price to $13 and still make a sale to Mike.
D)   Mike is getting a poor deal on the coffee.

Exam 4: Markets and Government

The French term for "let it be" is:

Correct Answer
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At times,there are conflicts between market outcomes that are efficient and outcomes that society deems fair.

Correct Answer
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Mike really enjoys Bitter Sweet coffee and is willing to pay $10 per cup.The retail price is $3.

Correct Answer
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Suppose that the price of a good is $22 and equilibrium price is $25.Compared to market equilibrium:

Correct Answer
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Use the following to answer questions Figure: Understanding Price Ceilings and Floors -(Figure: Understanding Price Ceilings and Floors)In the graph,a price of $25 would allow for an effective price ceiling.

Correct Answer
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Use the following to answer questions Figure: Determining Surplus 3 -(Figure: Determining Surplus 3) In the graph,how much is consumer surplus?

Correct Answer
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How large is deadweight loss in equilibrium?

Correct Answer
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Which of the following activities typically generates an external cost?

Correct Answer
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Use the following to answer questions Figure: Determining Surplus 3 -(Figure: Determining Surplus 3) In the graph,how much is producer surplus?

Correct Answer
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The invisible hand is the process describing how resources are allocated efficiently through individual decisions made in markets.

Correct Answer
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Use the following to answer questions Figure: Determining Surplus and Loss -(Figure: Determining Surplus and Loss)In the graph,if government sets a price of $12,there is a shortage of 40.

Correct Answer
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When market failure occurs,it often creates an economic:

Correct Answer
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Use the following to answer questions Figure: Determining Total Surplus -(Figure: Determining Total Surplus) In the graph,total producer surplus is shown by area:

Correct Answer
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Use the following to answer questions Figure: Determining Surplus and Loss -(Figure: Determining Surplus and Loss)In the graph,a price of $ 5 would allow for an effective price floor.

Correct Answer
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Implementing a price ceiling can cause:

Correct Answer
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If a price floor is set above the equilibrium price in the market,consumer surplus will be:

Correct Answer
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Suppose that the price of a good is $6 and equilibrium price is $8.Compared to market equilibrium:

Correct Answer
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Exam 4: Markets and Government

The French term for "let it be" is:

Correct AnswerverifiedShow Answer

At times,there are conflicts between market outcomes that are efficient and outcomes that society deems fair.

Correct AnswerverifiedShow Answer

Mike really enjoys Bitter Sweet coffee and is willing to pay $10 per cup.The retail price is $3.

Correct AnswerverifiedShow Answer

Suppose that the price of a good is $22 and equilibrium price is $25.Compared to market equilibrium:

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: Understanding Price Ceilings and Floors -(Figure: Understanding Price Ceilings and Floors)In the graph,a price of $25 would allow for an effective price ceiling.

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: Determining Surplus 3 -(Figure: Determining Surplus 3) In the graph,how much is consumer surplus?

Correct AnswerverifiedShow Answer

How large is deadweight loss in equilibrium?

Correct AnswerverifiedShow Answer

Which of the following activities typically generates an external cost?

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: Determining Surplus 3 -(Figure: Determining Surplus 3) In the graph,how much is producer surplus?

Correct AnswerverifiedShow Answer

The invisible hand is the process describing how resources are allocated efficiently through individual decisions made in markets.

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: Determining Surplus and Loss -(Figure: Determining Surplus and Loss)In the graph,if government sets a price of $12,there is a shortage of 40.

Correct AnswerverifiedShow Answer

When market failure occurs,it often creates an economic:

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: Determining Total Surplus -(Figure: Determining Total Surplus) In the graph,total producer surplus is shown by area:

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: Determining Surplus and Loss -(Figure: Determining Surplus and Loss)In the graph,a price of $ 5 would allow for an effective price floor.

Correct AnswerverifiedShow Answer

Implementing a price ceiling can cause:

Correct AnswerverifiedShow Answer

If a price floor is set above the equilibrium price in the market,consumer surplus will be:

Correct AnswerverifiedShow Answer

Suppose that the price of a good is $6 and equilibrium price is $8.Compared to market equilibrium:

Correct AnswerverifiedShow Answer

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