sampmid2b - 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) If there are no external costs or benefits, no price ceilings or price floors, and the good is not a public good or a common resource, then efficiency is 1) _________ A) achieved when the amount of output exceeds the amount produced in a competitive market. B) unrelated to the amount produced in a competitive market. C) achieved when the good is produced in a competitive market. D) achieved when a monopoly produces the good. 2) When the Smith's were shopping for their present home, the asking price from the previous owner was $250,000.00. The Smith's had decided they would pay no more than $245,000.00 for the house. After negotiations, the Smith's actually purchased the house for $239,000.00. Therefore, the previous owner earned a producer surplus of 2) _________ A) $5,000.00. B) $250,000.00. C) $11,000.00. D) an amount unknown given the information in the question. 3) A public good is 3) _________ A) consumed by only one person who has to pay for it. B) consumed by everyone simultaneously, as long as they pay for it. C) consumed by everyone simultaneously, even if they do not pay for it. D) consumed by only one person who does not have to pay for it. 4) The willingness to pay curve is the same as 4) _________ A) the demand curve, but not the marginal benefit curve. B) neither the marginal benefit curve nor the demand curve. C) the marginal benefit curve, but not the demand curve. D) the demand curve and the marginal benefit curve. 5) In the above figure, the lowest price for which the firm will sell its second ton of wheat is 5) _________ A) $50. B) $75. C) $25. D) $100. 6) Suppose the marginal cost of producing a good falls so that the marginal social cost curve shifts
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downward. Then the efficient quantity to produce of that product 6) _________ A) decreases. B) could increase, stay the same, or decrease. C) does not change. D) increases. 7) If the marginal benefit of the fifth slice of pizza is greater than the marginal cost of the fifth slice of pizza then the output level is 7) _________ A) efficient and less pizza should be produced. B) inefficient and more pizza should be produced. C) inefficient and less pizza should be produced. D) efficient and more pizza should be produced. 8) Consider the market for hot dogs. If the government imposes a tax on hot dogs, 8) _________ A) there will be a loss of consumer surplus. B) the marginal cost and marginal benefit of hot dogs will decrease. C) deadweight loss will be minimized. D) there will be a gain of producer surplus. 9) Marginal benefit is the benefit received from ________. 9) _________ A) consuming more goods or services B) producing the efficient quantity C) consuming one more unit of a good or service D) consuming the efficient quantity 10) In the above figure, when the price of pretzels is $3.00 per pound, the total producer surplus from all the CDs will be 10) _________ A) the sum of the difference between $3.00 and the opportunity cost of each and every pound produced.
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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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sampmid2b - MULTIPLE CHOICE Choose the one alternative that...

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