Eco06L3

  • 1

    •

    The figure illustrates the market for haircuts. Curve A is the _______ curve, and curve B is the _______ curve.

    eco06001.gif

    opportunity cost; opportunity benefit
    marginal benefit; marginal cost
    marginal cost; marginal benefit
    total cost; total benefit

  • 2

    •

    When 2,000 hamburgers per day are produced, the marginal benefit is $1.50 and the marginal cost is $1.00. And when 7,500 hamburgers per day are produced, marginal benefit is $1.00 and marginal cost is $1.50. The efficient production quantity of hamburgers is ________________ a day.

    7,500
    between 2,000 and 7,500
    2,000
    more than 7,500

  • 3

    •

    If the marginal benefit from a loaf of bread exceeds the marginal cost of producing a loaf of bread, then the resources will be used more efficiently if _____________ bread is produced and ______________ other goods are produced.

    less; more
    more; more
    less; fewer
    more; fewer

  • 4

    •

    In the market for CDs, 500 CDs a month are available. The value people place on the 500th CD a month exceeds the opportunity cost of producing it. Resource use _______________.

    would be more efficient if people would buy more CDs
    would be more efficient if people would value CDs more
    is inefficient
    is efficient

  • 5

    •

    Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then _______________ marginal benefit ____________________.

    the change in Adam's; plus the change in Bob's marginal benefit equals zero
    Adam's; decreases by more than Bob's marginal benefit increases
    Adam's; increases by more than Bob's marginal benefit decreases
    the change in Adam's; plus the change in Bob's marginal benefit is negative

  • 6

    •

    The figure tells us about the market for red roses. The consumer surplus is ________________ a day.

    eco06002.gif

    $1,000
    $800
    $20
    $200

  • 7

    •

    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 $30 a dozen, consumer surplus ________________.

    eco06003.gif

    might increase or decrease
    halves
    decreases to zero
    doubles

  • 8

    •

    The figure illustrates the market for hot dogs on Big Foot Island. The producer surplus is __________.

    eco06004.gif

    $1.20 a hot dog
    $60 an hour
    $240 an hour
    $180 an hour

  • 9

    •

    If the marginal cost of producing a service increases, then the efficient quantity to produce _______.

    depends on the marginal benefit
    remains the same
    decreases
    increases

  • 10

    •

    In the competitive market for balloon rides, marginal cost equals marginal benefit when 3,000 balloon rides a day are taken and the price of a ride is $130. Which of the following statements is true?

    There is a free-ride problem.
    Too few rides are available.
    Deadweight loss is zero.
    Too many rides are available.

    Please enter your name and press the SEND button