# sampmid2 - MULTIPLE CHOICE Choose the one alternative that...

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is true? 1) _________ A) At the efficient quantity, marginal benefit equals marginal cost. B) Marginal benefit decreases as the quantity consumed decreases. C) Marginal cost increases as the quantity produced decreases. D) If marginal benefit exceeds marginal cost by as much as possible, production is efficient. 2) In the above figure, the producer surplus would be zero if the price per ton of wheat was 2) _________ A) \$100. B) \$50. C) \$75. D) \$25. 3) The requirement that people in similar situations be treated similarly is called 3) _________ A) utilitarianism. B) the big tradeoff. C) the symmetry principle. D) efficiency.

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4) The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is \$2 per gallon, then the gallon that gives Dana exactly zero consumer surplus is 4) _________ A) the 20th gallon. B) the 16th gallon. C) the 8th gallon. D) the 12th gallon. 5) The figure tells us about the market for red roses. On Valentines Day, the demand for red roses doubles. If florists increase the price to \$25 a dozen, consumer surplus ________. 5) _________ A) decreases B) decreases to zero C) might increase or decrease depending on what happens to the supply of roses D) halves
6) In the above figure, 300,000 purses per month is 6) _________ A) the efficient amount to produce because the sum of consumer surplus and producer surplus is maximized. B) an inefficient amount to produce because consumer surplus is not maximized. C) the efficient amount to produce because consumer surplus is maximized. D) an inefficient amount to produce because the sum of consumer surplus and producer surplus is not maximized. 7) Suppose a country produces only bikes and clothing. The country achieves an efficient allocation of resources when 7) _________ A) the marginal benefit of producing a bike equals the marginal cost of producing a bike. B) it produces equal amount of bikes and clothes. C) it can't produce any more bikes unless it gives up clothing. D) the prices charged for the goods are as low as possible. 8) In the above figure, the total consumer surplus at the efficient level of output is ________. 8)

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_________ A) \$9.0 million B) \$8.5 million C) \$4.5 million D) \$2.5 million 9) In the above figure, what is the numerical value of producer surplus at the efficient quantity? 9) _________ A) \$0 B) \$2,000 C) \$1,000 D) \$4,000 10) In the above figure, if output is 10 units, then the total deadweight loss is 10) _________ A) \$5. B) \$10. C) \$60. D) \$20. 11) The moral principle at the center of all major religions is the ________. 11) _________ A) symmetrically fair principle B) fairness principle C) common property syndrome
D) symmetry principle 12) The supplier of your ________ is most likely a monopoly. 12) _________ A) toothpaste B) shoes C) electricity D) textbooks Price (dollars per umbrel

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## This note was uploaded on 04/09/2008 for the course ECON 304K taught by Professor Ledyard during the Fall '08 term at University of Texas.

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sampmid2 - MULTIPLE CHOICE Choose the one alternative that...

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