Question : 21) In the above figure, the market at its equilibrium. : 1226493

21) In the above figure, the market is at its equilibrium. Area A is equal to

A) consumer surplus.

B) total revenue.

C) marginal benefit.

D) producer surplus.

E) total surplus.

22) In the above figure, the market is at its equilibrium. Area B is equal to

A) consumer surplus.

B) total revenue.

C) marginal benefit.

D) producer surplus.

E) total surplus.

23) In the above figure, the market is at its equilibrium. Area A + area B is equal to

A) consumer surplus.

B) total revenue.

C) total surplus.

D) marginal benefit.

E) producer surplus.

24) The concept of “the invisible hand” suggests that

A) products are produced out of a seller’s sense of charity.

B) when the seller is better off, the buyer is worse off.

C) sellers exploit consumers with high prices.

D) buyers and sellers are self-interested.

E) the command system is the only way of efficiently allocating resources.

25) Adam Smith’s Wealth of Nations, written in 1776, describes the market’s invisible hand representing the

A) King of England’s control over the colonies.

B) control all governments have in organizing the market.

C) efficiency the market achieves without the interference of governments.

D) inefficiency of markets when governments do not organize them.

E) invisible command system that efficiently allocates resources.

26) What did Adam Smith identify as the source of the invisible hand in 1776?

A) a benevolent central government that decided was best for everyone

B) an individual’s concern for fellow humans

C) an individual’s own self-interest

D) the stock market

E) buyers’ and suppliers’ concerns to obtain and retain good reputations

27) The “invisible hand” refers to the notion that

A) competitive markets send resources to their highest valued uses.

B) government intervention is necessary to ensure efficiency.

C) marginal benefit decreases as more is consumed.

D) marginal cost increases as more is produced.

E) no matter what allocation method is used, the resulting production is efficient.

28) The efficiency of competitive markets happens because

A) of the benevolence of the butcher, the brewer, and the baker.

B) people make environmentally aware purchasing decisions.

C) prices adjust to make buying plans and selling plans compatible.

D) government organizes and monitors production.

E) the U.S. economy uses a command system to allocate resources within the competitive markets.

29) The concept of “the invisible hand” suggests that to attain efficiency, the government should

A) guide economic activity.

B) set prices.

C) leave prices and output decisions to the competitive market.

D) regulate all production decisions, but not price decisions.

E) make sure that a command system is used to allocate resources.

30) In a competitive market for a private good with no price or quantity regulations, no external cost nor external benefit, low transactions costs, and no taxes or subsidies,

A) the allocation of resources is planned by the government.

B) production is organized by government organizations.

C) efficiency can be attained in the market with no government intervention.

D) efficiency is usually be achieved by majority rule.

E) efficiency is generally obtained by using a command system.