Question :
1.4 The Second Principle of Economics: Equilibrium
1) Which of the : 1377286
1.4 The Second Principle of Economics: Equilibrium
1) Which of the following statements is true of equilibrium?
A) Economic agents have an incentive to divert from equilibrium.
B) Each economic agent can reach equilibrium irrespective of the actions of others.
C) In equilibrium, the opportunity cost of the choices made by each economic agent is zero.
D) In equilibrium, all economic agents are choosing the best feasible option simultaneously.
2) Which of the following will hold true if the market for cameras is in equilibrium at a price of $40?
A) Sellers of cameras will have an incentive to charge a price higher than $40.
B) The quantity of cameras produced will equal the quantity of cameras bought in the market.
C) Buyers of cameras will want to buy fewer cameras than they are purchasing at equilibrium.
D) If the cost of producing cameras falls below $40 per camera, all sellers will stop supplying cameras.
3) When the market for a commodity is in equilibrium:
A) no economic agent will want to change their behavior.
B) there will still be some unsold stock of the commodity.
C) all buyers of the commodity will want to change their behavior.
D) all sellers of the commodity will want to change their behavior.
4) Which of the following is true of equilibrium?
A) Equilibrium refers to a situation where the government allocates resources among economic agents.
B) Equilibrium refers to a situation where all economic agents simultaneously optimize after considering each other’s actions.
C) Equilibrium refers to a situation where all economic agents are making sub-optimal choices and have an incentive to change behavior.
D) Equilibrium refers to a situation where an economic agent can be made better off without making anyone else worse off.
5) The term “free riders” refers to people who:
A) don’t contribute but still benefit from others’ actions.
B) make economic decisions randomly and are not rational.
C) selflessly pay for others’ consumption of goods and services.
D) haggle over the prices of the goods and services that they buy.
6) Which of the following is an example of free riding?
A) An individual who sneaks inside a music concert
B) A consumer who buys his groceries from a nearby store
C) A tax payer who exercises in the public park near his house
D) A club member who makes voluntary contributions to the club
7) Which of the following is an example of free riding?
A) A housekeeper cleaning a house
B) A tax evader enjoying national security
C) A consumer paying for pollution control
D) An individual who buys a ticket for a baseball match
8) Each member in a group might do what’s best for himself or herself instead of behaving in a way that optimizes the well-being of the entire group. This gives rise to the problem of:
A) Pareto inefficiency.
B) free riding.
C) irrational behavior.
D) disequilibrium.
9) Which of the following statements is true of free riding?
A) Free riding is easy to detect and punish.
B) Free riding reduces with social pressure.
C) Free riding is not affected by incentives.
D) Free riding does not impose a cost on society.
10) Assume that a house is rented by four students. When it comes to keeping the house clean, each of the four roommates has an incentive to leave cleaning to the others. As a result, the house is never clean. Which of the following is the best solution to this problem of free riding?
A) Ask every roommate to clean the house if they dirty it
B) Require every roommate to contribute to a cleaning service
C) Require each roommate to pay more toward the house rent and groceries
D) Assign one roommate the responsibility to keep a watch over the other students
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