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ECON100 Midterm Practice Flashcards | StudBud
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ECON100 Midterm Practice
ECON100 Midterm Practice
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1
All of the following statements about marginal benefit are correct EXCEPT
the marginal benefit is the benefit a person receives from consuming one more unit of agood or service.
the marginal benefit of a good or service is measured as the maximum amount that aperson is willing to pay for one more unit of it.
the marginal benefit of a good decreases as the quantity consumed of the go
the marginal benefit of a good is equal to zero when resource use is effici
2
The"It's not fair if the result isn't fair" idea is an income tax designed to transfer wealth from the rich to the poor
increases efficiency and equity.
increases efficiency and not affect equity.
decreases efficiency and increases equity.
decreases efficiency and equity.
3
In the above table, when 200 brownies are produced
marginal benefit is less than marginal cost, and there is a deadweight loss
marginal benefit equals marginal cost, and resource use is efficient.
marginal benefit is greater than marginal cost. Resource use is efficient
marginal benefit is greater than marginal cost. There is a deadweight loss
4
D1 is the old demand. Note that the two demand curves are parallel. Which of the following statements is TRUE?
More than one of the above statements is true.
Demand increases by 30 units.
Equilibrium quantity increases by 30 units.
Quantity demanded increases by 30 units.
5
At the equilibrium in this market, which area represents CONSUMER surplus?
There is no consumer surplus.
Area w + y.
Area x + y.
Area w.
6
In general, resources are used efficiently when the
opportunity cost of the goods being produced is as low as possible
marginal benefit from a good exceeds its marginal cost by as much as possib
none of the above
goods produced are those valued most highly
7
Charlie's consumer surplus from the first slice of pizza he buys is greater than the consumer surplus from the second bc
decreasing marginal costs
increasing marginal benefits
increasing marginal cost.
decreasing marginal benefits.
8
If the price of this good is $1 per unit, what will be the quantity demanded?
20
10
15
5
9
In a competitive market, which of the following statements is wrong?
The minimum supply price is the same as opportunity cost.
The willingness to pay for a good is the same as the value of the good.
The marginal benefit is the same as opportunity cost.
The value of the good is the same as marginal benefit.
10
Overproduction implies that for the last unit produced
the deadweight loss is zero.
marginal social benefit equals marginal social cost.
marginal social cost exceeds marginal social benefit
marginal social benefit exceeds marginal social cost.
11
If there are no external costs or benefits, a good's marginal cost curve
measures the minimum price that producers must be offered to produce a given quantityof the good.
is the same as its supply curve.
)None of the above answers are correct.
Both answers A and B are correct.
12
A country produces only bikes and clothing. The country achieves an efficient allocation of resources when
it can't produce any more bikes unless it gives up clothing.
the marginal benefit of producing a bike equals the marginal cost.
the prices charged for the goods are as low as possible.
it produces equal amount of bikes and clothes.
13
Which of the following CANNOT result in an increase in price in a competitive market for a normal good?
An increase in the price of a substitute for this good.
An increase in income.
A decrease in the price of a complement to this good.
A decrease in the wages paid to workers who produce this good.
14
The equilibrium price is ____ the equilibrium quantity is _____.
7, 40
7, 30
8, 40
5, 30
15
The figure above shows Clara's demand for CDs. The market price for a CD is $15. Which statement is true?
When Clara buys 6 CDs, she receives a total of $15 of consumer surplus
When Clara buys 6 CDs, she receives $15 of consumer surplus on her 6th CD.
When Clara buys 6 CDs, she receives a total of $45 of consumer surplus
When Clara buys 6 CDs, she receives a total of $30 of consumer surplus.
16
What does the equilibrium price equal in this market?
$45
$15
$30
8$
17
The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus is
$10
$5
$125
$25
18
If there are no external costs, the supply curve shows the quantity supplied at each price and also shows the
marginal cost of each unit of the good.
benefit from each unit of the good.
) total surplus of the good
maximum price for which suppliers will sell each unit of the good.
19
The willingness to Pay curve is the same as
the marginal benefit curve, but not the demand curve.
neither the marginal benefit curve nor the demand curve.
the demand curve and the marginal benefit curve.
the demand curve, but not the marginal benefit curve.
20
Utilitarianism is a principle whose goal is ________.
) equal pay for equal work
the greatest happiness for the greatest number
the greatest pay for the greatest number
equal happiness for all workers
21
The figure above shows Clara's demand for CDs. If the market price for a CD is $10, then Clara
will buy no CDs.
receives no consumer surplus on the 6th CD she buys.
receives a total of $40 of consumer surplus.
receives a total of $10 of consumer surplus.
22
Suppose the equilibrium price of good X is $10 and the equilibrium quantity is 60 units. If the price of good X is $4:
The quantity demanded will be less than 60 units.
There will be an excess demand for good X.
There will be an excess supply of good X.
The quantity supplied will be more than 60 units.
23
Consider the market for hot dogs. As long as the marginal benefit of consuming hot dogs is greater than the price,
we will receive consumer surplus from eating hot dogs.
) there is no decreasing marginal benefit of eating hot dogs.
) the price of hot dogs will rise.
the value of hot dogs will rise.
24
If supply decreases from S1 to S2, which area represents the change in PRODUCER surplus?
b + c – f.
b-f-e
c + f + g + e.
a + b + c.
25
Which of the following CANNOT result in a decrease in the equilibrium quantity sold of an inferior good?
An increase in the price of a complement for the good.
An increase in consumer incomes.
An increase in wages paid to workers who produce the good.
An increase in the price of a substitute for the good.
26
Given the equilibrium quantity of 300 units, which areas represent MARKET SURPLUS
a+b+c+d.
a+c
a+b
a+b+c
27
Marginal Cost
is the additional cost to the consumer of consuming another unit of a good.
decreases as more of a good is produced and, hence, is depicted by a downward slopingcurve
is equal to price times quantity sold
the opportunity cost added to making one more good or service
28
Consumer surplus is the ________.
value of the good minus its price summed over the quantity purchased
greatest when price increases
the number of goods sold times the market price
) total price paid by consumers minus the total cost of producing the good
29
f price is $8 per unit, quantity supplied will equal:
$40
$20
$30
$10
30
The supply curve shows the
profit that suppliers receive from producing another unit of the good.
maximum price suppliers must receive in order to produce another unit
minimum price suppliers must receive in order to produce another unit
amount of producer surplus suppliers receive
