chapter7 practice questions

Chapter7 practice - Chapter 7 Which of the following statements illustrate the concept of efficiency A The production of the good generates very

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Chapter 7 1. Which of the following statements illustrate the concept of efficiency? A) The production of the good generates very little pollution. B) At equilibrium, all mutually beneficial transactions have taken place. C) The production of the good generates very few by-products. D) The consumption of the good produces very little waste. 2. Excess demand in the market is evidence of A) Pareto efficiency B) the opportunity for surplus-enhancing trades C) an economic pie that is too small. D) equilibrium Use the following to answer questions 3-4: Ingrid has been waiting for the show “Mamma Mia!” to come to town. When it finally does come, ticket prices are $60. Ingrid's reservation price is $75. But when Ingrid tries to buy a ticket, they are sold out. 3. The fact that Ingrid cannot buy a ticket to “Mamma Mia!” is evidence of A) Pareto efficiency in this market. B) A price ceiling above the equilibrium price. C) A situation that is not Pareto efficient. D) The benefits of allocating resources on the first-come, first-served basis. 4. Ingrid decides to try to buy a ticket from a scalper (a person who has purchased extra tickets at the box office with the intent to resell those tickets). If Ingrid finds someone who is willing to sell her a ticket for $70, she should A) not purchase it because it is overpriced by $10. B) not purchase it because the cost to the scalper was only $60, and it is unfair of the scalper to take advantage of the ticket shortage. C) purchase it, leading to an increase in surplus. D) purchase it even though it is not surplus enhancing. The Fishpond is well known for catfish. The owner of the pond only allows 5 people to fish per day to prevent over-fishing. The fishing time is 10:00am to 4:00pm. Occasionally more than 5 people want to fish on the same day. The following table shows the list of people who wanted to fish last Tuesday, together with their respective times of arrival and reservation prices for fishing that day. 1
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Arrival time Reservation price ($) Dan 9:30 am 5 Robin 9:35 am 4 Mark 9:45 am 3 Tanya 9:50 am 8 Scott 9:52 am 6 Aaron 9:55 am 11 Shelly 9:58 am 4 Frank 10:00 am 10 [QUESTION] 5. If the owner operates it on a first come, first served basis, who will not be able to fish that day? A) Dan, Robin, and Mark
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This note was uploaded on 02/04/2011 for the course ECON 1 taught by Professor Tang during the Spring '08 term at UCSD.

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Chapter7 practice - Chapter 7 Which of the following statements illustrate the concept of efficiency A The production of the good generates very

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