Question : 6.7   Integrative Questions 1) The figure above shows the market for : 1239100

6.7   Integrative Questions

1) The figure above shows the market for brooms. If the market is efficient,

A) 0 brooms are produced.

B) 600 brooms are produced.

C) more than 1000 brooms are produced.

D) between 0 and 600 brooms are produced.

E) between 600 and 1000 brooms are produced.

2) The figure above shows the market for brooms. If 800 brooms are produced,

A) consumer surplus is maximized.

B) producer surplus is maximized.

C) market failure and a deadweight loss occur.

D) marginal cost is less than marginal benefit.

E) there is no deadweight loss.

3) The figure above shows the market for brooms. If 800 brooms are produced,

A) marginal cost exceeds marginal benefit.

B) a deadweight loss does not occur because everyone who wants to buy a broom can.

C) the “big tradeoff” occurs.

D) value exceeds price.

E) the “fair results” approach to fairness is definitely not violated.

4) The figure above shows the market for brooms. If 400 brooms are produced,

A) consumer surplus is maximized.

B) producer surplus is maximized.

C) market failure and a deadweight loss occur.

D) marginal cost is greater than marginal benefit.

E) consumer surplus equals zero.

5) The figure above shows the market for brooms. Which of the following could lead to the production of fewer than 600 brooms?

A) a monopoly

B) a deadweight loss

C) subsidies

D) an external cost

E) a big tradeoff

6) When society must decrease the production of something in order to produce more of another good or service, society has necessarily achieved

A) only production efficiency.

B) only allocative efficiency.

C) both production efficiency and allocative efficiency.

D) a free lunch.

E) the maximum opportunity cost..

7) When a society achieves production efficiency, it is

A) definitely producing at a point on its PPF.

B) perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF.

C) definitely producing that combination of goods and services that society values most highly.

D) not fully employing all of its available resources to produce goods and services.

E) enjoying a free lunch.

8) Production efficiency requires that

A) the economy be producing on the PPF but the marginal cost of a good does not need to equal its marginal benefit.

B) the economy be producing on the PPF and that the marginal cost of a good equals its marginal benefit.

C) the marginal cost of a good equals its marginal benefit but the economy does not need to be producing on its PPF.

D) the society be producing at the point of allocative efficiency.

E) opportunity costs be minimized.

9) If an economy is producing on its PPF, then it is definitely achieving

A) both production and allocative efficiency.

B) only production efficiency, but it definitely is not achieving allocative efficiency.

C) only allocative efficiency, but it is definitely not achieving production efficiency.

D) neither production nor allocative efficiency.

E) only production efficiency.

10) If society can produce more of one good but must forgo some of another good to do so, it is definitely achieving

A) both production and allocative efficiency.

B) only production efficiency.

C) only allocative efficiency.

D) neither production nor allocative efficiency.

E) None of the above answers is correct because when society must forgo another good to produce more of one good, then society might be production efficient or it might be allocatively efficient.