Question : 11) If, in a competitive market, marginal benefit less than : 1267068

11) If, in a competitive market, marginal benefit is less than marginal cost,

A) the net benefit to consumers from participating in the market is less than the net benefit to producers.

B) the government must force producers to raise prices in order to achieve economic efficiency.

C) the quantity sold is greater than the equilibrium quantity.

D) the quantity sold is less than the equilibrium quantity.

12) In a competitive market the demand curve shows the ________ received by consumers and the supply curve shows the ________.

A) utility; average cost.

B) marginal benefit; marginal cost

C) economic surplus; opportunity cost

D) net benefit; net cost

Figure 4-4

13) Refer to Figure 4-4.  The figure above represents the market for pecans.  Assume that this is a competitive market. At a price of $9

A) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low.

B) producers should lower the price to $3 in order to sell the quantity demanded of 4,000.

C) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high.

D) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently low.

14) Refer to Figure 4-4. The figure above represents the market for pecans. Assume that this is a competitive market.  If the price of pecans is $3

A) economic surplus is maximized.

B) not enough consumers want to buy pecans.

C) the quantity supplied is less than the economically efficient quantity.

D) the quantity supplied is economically efficient but the quantity demanded is economically inefficient.

15) Refer to Figure 4-4. The figure above represents the market for pecans.  Assume that this is a competitive market.  If the price of pecans is $3, what changes in the market would result in an economically efficient output?

A) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase.

B) The quantity supplied would increase, the quantity demanded would decrease and the equilibrium price would increase.

C) The price would increase, the demand would decrease and the supply would increase.

D) The price would increase, the quantity demanded would decrease and the quantity supplied would increase.

16) Refer to Figure 4-4.  The figure above represents the market for pecans.  Assume that this is a competitive market.  If 8,000 pounds of pecans are sold

A) the deadweight loss is equal to economic surplus.

B) producer surplus equals consumer surplus.

C) the marginal benefit of each of the 8,000 pounds of pecans equals $9.

D) marginal benefit is equal to marginal cost.

17) Refer to Figure 4-4.  The figure above represents the market for pecans.  Assume that this is a competitive market.  Which of the following is true?

A) If the price of pecans is $3 the output will be economically efficient but there will be a deadweight loss.

B) If the price of pecans is $9 consumers will purchase more than the economically efficient output.

C) Both 40,000 pounds and 12,000 pounds are economically inefficient rates of output.

D) If the price of pecans is $3 producers will sell 12,000 pounds of pecans but this output will be economically inefficient.

18) If equilibrium is achieved in a competitive market 

A) there is no deadweight loss.

B) the deadweight loss will be maximized.

C) the deadweight loss will equal the sum of consumer surplus and producer surplus.

D) the deadweight loss will be the same as the opportunity cost of the last unit of output sold.

19) If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximized, then

A) maximum deadweight loss occurs.

B) economic efficiency is achieved.

C) profits are maximized.

D) costs are minimized.

20) Economic efficiency is a market outcome in which the marginal benefit of consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized.

21) Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

22) The sum of consumer surplus and producer surplus is called economic surplus.

23) Will equilibrium in a market always result in an outcome that is economically efficient? Explain.

24) The graph below represents the market for walnuts. Identify the values of the marginal benefit and the marginal cost at the output levels of 2,000 pounds, 4,000 pounds and 6,000 pounds. At each of these output levels, state whether output is inefficiently high, inefficiently low, or economically efficient.

25) The graph below represents the market for lychee nuts. The equilibrium price is $7.00 per bushel, but the market price is $5.00 per bushel.  Identify the areas representing consumer surplus, producer surplus, and deadweight loss at the equilibrium price of $7.00 and at the market price of $5.00.