Question 1

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

Accepted Answer

A)   $0.00.
B)   $0.50.
C)   $1.00.
D)   $1.50.
E)   $2.50.

Question 2

When the city of Fresno holds a referendum to determine if taxes will be raised to pay for road repairs,the city is using a ________ allocation method.

Accepted Answer

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

Question 3

Consumer surplus equals

Accepted Answer

A)   producer surplus at a market equilibrium.
B)   marginal benefit minus price, summed over the quantity consumed.
C)   price minus marginal cost.
D)   the deadweight loss if there is underproduction.
E)   the deadweight loss plus the producer surplus.

Question 4

-The figure above shows the market for hot dogs.
a.What is the maximum price consumers are willing to pay for the 25th hot dog?
b.What is the efficient quantity?
c.Suppose that the production was limited to 25 hot dogs.In the figure,indicate the amount of the deadweight loss.

Accepted Answer

a.Consumers are willing to pay a maximum...

Question 5

When efficiency is attained,the sum of the total amount of consumer surplus and producer surplus is

Accepted Answer

A)   minimized.
B)   maximized.
C)   equal to the deadweight loss.
D)   undefined.
E)   equal to zero.

Question 6

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A)   exceeds the marginal cost regardless of how much the difference is.
B)   is less than its marginal cost.
C)   is equal to its marginal cost.
D)   equals zero.
E)   exceeds the marginal cost by as much as possible.

Question 7

The figure above shows the demand curve for pizza and the market price of pizza.
-In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

Accepted Answer

A)   $15
B)   $10
C)   $12
D)   $22.50
E)   $5

Question 8

-In the above figure,if the quantity is equal to 1,500,000 units,the deadweight is equal to

Accepted Answer

A)   area A + area B.
B)   area C.
C)   area B + area F.
D)   area G + area H.
E)   None of the above answers is correct because the deadweight loss is equal to zero.

Question 9

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

Accepted Answer

A)   force
B)   sharing equally
C)   command
D)   majority rule
E)   lottery

Question 10

Often people trying to withdraw money from their bank must wait in line,which reflects a ________ allocation method.

Accepted Answer

A)   first-come, first-served
B)   market price
C)   contest
D)   majority rule
E)   command

Question 11

A demand curve can be interpreted as

Accepted Answer

A)   a marginal benefit curve.
B)   a total benefit curve.
C)   an average benefit curve.
D)   a marginal cost curve.
E)   None of the above answers is correct.

Question 12

Which of the following situations describing a resource allocation method most resembles the market price method?

Accepted Answer

A)   Food from the Weld County Food Bank is distributed to families in need.
B)   Lattes are sold at Starbucks.
C)   Jose works at Intel. His manager tells him what work needs to be completed each month.
D)   Matt's mother had the rule that whoever cuts the cake chooses their slice last.
E)   Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not. The club purchased the sets.

Question 13

A public good

Accepted Answer

A)   is a good that is usually consumed in public, such as a restaurant meal.
B)   is a good people can consume even if they do not pay for it.
C)   is a good produced by government.
D)   results in an efficient allocation of resources.
E)   is a good for which people are willing to pay a very high price.

Question 14

-The table above shows the production possibilities frontier for the nation of Isolanda.
a.Find the marginal cost of a pound of fish using the above PPF.
b.How does the marginal cost of a pound of fish change as more fish are caught?

Accepted Answer

a.The table above shows the marginal c...

Question 15

In a competitive market for a private good with no price or quantity regulations,no external cost nor external benefit,low transactions costs,and no taxes or subsidies,

Accepted Answer

A)   the allocation of resources is planned by the government.
B)   production is organized by government organizations.
C)   efficiency can be attained in the market with no government intervention.
D)   efficiency is usually be achieved by majority rule.
E)   efficiency is generally obtained by using a command system.

Question 16

Which of the following government policies ensures market efficiency?

Accepted Answer

A)   subsidy
B)   tax
C)   price regulations
D)   quantity regulations
E)   None of the above answers is correct.

Question 17

If a landlord will rent an apartment only to married couples over 30 years old,the landlord is allocating resources using a ________ allocation method.

Accepted Answer

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

Question 18

Auditors working for a large accounting firm are often away from the office.When they are in the office,they are allowed to use any desk that is available.Which method is used to allocate desks?

Accepted Answer

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

Question 19

-In the figure above,suppose that $20 is the market equilibrium price.What is the amount of the consumer surplus?

Accepted Answer

A)   $3,375
B)   $3,000
C)   $375
D)   150 units
E)   $1,500

Question 20

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13,a producer surplus exists for Sea World." Is this statement true or false?

Accepted Answer

The statement is true.Anytime ...

Exam 6: Efficiency and Fairness of Markets

Consumer surplus equals

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If the price of a visit to Sea World exceeds the marginal cost of the visit by $13,a producer surplus exists for Sea World." Is this statement true or false?

Correct AnswerverifiedThe statement is true.Anytime ...View AnswerShow Answer

-In the above figure,if the quantity is equal to 1,500,000 units,the deadweight is equal to

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The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

Correct AnswerverifiedShow Answer

-The table above shows the production possibilities frontier for the nation of Isolanda. a.Find the marginal cost of a pound of fish using the above PPF. b.How does the marginal cost of a pound of fish change as more fish are caught?

Correct Answerverified a.The table above shows the marginal c...View AnswerShow Answer

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

Correct AnswerverifiedShow Answer

Often people trying to withdraw money from their bank must wait in line,which reflects a ________ allocation method.

Correct AnswerverifiedShow Answer

-The figure above shows the market for hot dogs. a.What is the maximum price consumers are willing to pay for the 25th hot dog? b.What is the efficient quantity? c.Suppose that the production was limited to 25 hot dogs.In the figure,indicate the amount of the deadweight loss.

Correct Answerverifieda.Consumers are willing to pay a maximum...View AnswerShow Answer

When efficiency is attained,the sum of the total amount of consumer surplus and producer surplus is

Correct AnswerverifiedShow Answer

In a competitive market for a private good with no price or quantity regulations,no external cost nor external benefit,low transactions costs,and no taxes or subsidies,

Correct AnswerverifiedShow Answer

A demand curve can be interpreted as

Correct AnswerverifiedShow Answer

Which of the following situations describing a resource allocation method most resembles the market price method?

Correct AnswerverifiedShow Answer

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

Correct AnswerverifiedShow Answer

A public good

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When the city of Fresno holds a referendum to determine if taxes will be raised to pay for road repairs,the city is using a ________ allocation method.

Correct AnswerverifiedShow Answer

Auditors working for a large accounting firm are often away from the office.When they are in the office,they are allowed to use any desk that is available.Which method is used to allocate desks?

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-In the figure above,suppose that $20 is the market equilibrium price.What is the amount of the consumer surplus?

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If a landlord will rent an apartment only to married couples over 30 years old,the landlord is allocating resources using a ________ allocation method.

Correct AnswerverifiedShow Answer

Allocative efficiency is achieved when the marginal benefit of a good

Correct AnswerverifiedShow Answer

Which of the following government policies ensures market efficiency?

Correct AnswerverifiedShow Answer

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The statement is true.Anytime ...
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a.The table above shows the marginal c...
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a.Consumers are willing to pay a maximum...
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