Question :
31) At a competitive equilibrium, if there no taxes, subsidies, : 1226494
31) At a competitive equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities
A) the marginal benefit is greater than the marginal cost.
B) resource use is efficient.
C) the marginal benefit is less than the marginal cost.
D) both the marginal benefit and the marginal cost of the last unit produced equal zero.
E) the marginal benefit is greater than the marginal cost by as much as possible.
32) At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities
i.consumer surplus is minimized.
ii.marginal cost equals marginal benefit.
iii.resources are efficiently used.
iv.producer surplus is minimized.
A) ii and iii
B) i and ii
C) i and iv
D) i, ii, iii, and iv
E) ii only
33) When technology increases the supply of a good and lower prices increase the quantity demanded,
A) the economy is reallocating resources to achieve an efficient allocation.
B) consumer surplus falls.
C) the invisible hand is unnecessary.
D) the marginal benefit of the good increases with the quantity produced.
E) the economy is no longer efficient because the quantity changes.
34) When output is less than the efficient level,
A) consumers are willing to pay more for another unit than it costs to produce the unit.
B) the amount consumers are willing to pay equals the cost of production.
C) the cost of production is greater than the price consumers are willing to pay.
D) the production costs can’t be measured.
E) the marginal cost of producing the good must be greater than the marginal benefit from the good.
35) When there is market failure so that a market produces less than the efficient amount,
A) consumer surplus definitely is larger than when the efficient quantity is produced.
B) the sum of producer surplus and consumer surplus is larger than when the efficient quantity is produced.
C) there is a deadweight loss.
D) consumers definitely lose and producers definitely gain.
E) consumers definitely gain and producers definitely lose.
36) A quantity less than the equilibrium quantity in a competitive market is inefficient because
A) the marginal benefit of another unit is greater than its marginal cost.
B) too much of the good is being produced.
C) the marginal cost of another unit is greater than its marginal benefit.
D) the marginal benefit of another unit is not equal to zero.
E) the marginal benefit is not maximized.
37) Overproduction results in
A) external costs.
B) external benefits.
C) deadweight loss.
D) super-efficiency.
E) the marginal benefit of the last unit produced being larger than the marginal cost.
38) What do economists call the loss society experiences when there is market failure and the production of a good is less than the efficient amount?
A) tax
B) subsidy
C) price floor
D) deadweight loss
E) quantity restriction
39) In the above figure, if the market is in equilibrium, area A + area B + area C equals
A) total surplus.
B) consumer surplus.
C) deadweight loss.
D) producer surplus.
E) total revenue.
40) In the above figure, if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied, then the producer surplus is equal to
A) area D + area F.
B) area C + area E.
C) area A + area B + area C.
D) area A + area B.
E) area B + area D + area F.
41) In the above figure, if the quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied, then area C + area E is equal to
A) deadweight loss.
B) consumer surplus.
C) total surplus.
D) producer surplus.
E) total revenue.
