AssignmentVI

AssignmentVI - ARE 201 Introduction to Agricultural...

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Spring 2008 Assignment VI (Chapter 6) 1) A supply curve is the same as a A) marginal cost curve. B) deadweight loss curve. C) total benefit curve. D) total cost curve. E) marginal benefit curve. Topic: Supply curve and marginal cost curve 2) Deadweight loss is created when a market produces A) the efficient quantity. B) either more or less than the efficient quantity. C) more than the efficient quantity but not when less than the efficient quantity is produced. D) less than the efficient quantity but not when more than the efficient quantity is produced. E) None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity. Topic: Deadweight loss 3) What do economists call the loss society experiences when the production of a good is less than the efficient amount? A) price floor B) tax C) deadweight loss D) quantity restriction. E) subsidy Topic: Deadweight loss 1
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4) In the figure above, at the market price of $15, the consumer surplus equals A) 2,000 units B) $10,000. C) $40,000. D) $30,000. E) None of the above answers is correct. Topic: Consumer surplus 5) In the figure above, for the 3,000th unit, the maximum price a consumer is willing to pay is A) $15. B) $10. C) $5. D) $0. E) None of the above answers is correct. Topic: Marginal benefit 6) Air pollution is an external cost because it A) is created only when production occurs. B) is a cost not borne by the producer of the good. C) is a pollution of the external environment. D) is not associated with resource use. E) benefits no one. Topic: External cost 7) A good or service that is consumed simultaneously by everyone even if they don't pay for it is called ____ good. A) an inferior B) an external C) a public D) a private E) a normal Topic: Public good 2
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8) A monopoly is A) the single buyer of some good or service. B) a firm that has control of a market because it is the only seller. C) a firm that creates enormous external costs. D) a cost of producing a good or service. E) a firm that faces intense competition. Topic: Monopoly 9) Which of the following statements is correct? A) An increase in price has no effect on consumer surplus. B) An increase in price decreases consumer surplus. C) Consumer surplus equals the price paid for a good. D) The consumer surplus from a good or service must always equal producer surplus. E) The consumer surplus from a good is always larger than the total benefit from the good. Topic: Consumer surplus 10) We allocate resources efficiently when A) marginal benefit is greater than marginal cost by any amount. B) marginal benefit is greater than marginal cost by as much as possible. C) total benefit is greater than total cost.
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AssignmentVI - ARE 201 Introduction to Agricultural...

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