Question : 61) When society produces the combination of goods and services : 1226525

 

 

61) When society produces the combination of goods and services on the PPF that it values the most highly, society has

A) achieved only production efficiency and definitely not allocative efficiency.

B) achieved only allocative efficiency definitely not production efficiency.

C) achieved both production efficiency and allocative efficiency.

D) achieved a free lunch.

E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency.

 

62) To determine how much of a good to produce to achieve allocative efficiency, we

A) construct a production possibilities frontier and choose the midpoint.

B) construct a production possibilities frontier and choose any point on it.

C) must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal.

D) must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good.

E) must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good.

 

63) Suppose the nation is producing at a point on its PPF. If the marginal cost of producing one more computer is greater than the marginal benefit, the nation is producing

A) too few computers to be allocatively efficient.

B) too many computers to be allocatively efficient.

C) the correct number of computers to be allocatively efficient.

D) at the point of allocative efficiency.

E) More information is needed to determine if the nation is or is not producing at the allocatively efficient point.

64) The figure above shows Kaley’s marginal benefit from swimming with manatees and Scott’s marginal cost of providing manatee swimming tours. At 1 manatee swim per week, Kaley’s marginal benefit is ________ and Scott’s marginal cost is ________.

A) $40; $10

B) $40; $40

C) $90; $50

D) None of the above answers is correct.

 

65) The figure above shows Kaley’s marginal benefit from swimming with manatees and Scott’s marginal cost of providing manatee swimming tours. If Scott offers two swim tours per week, he incurs a marginal cost of

A) more than $30.

B) $30.

C) $20.

D) $10.

E) $2.

66) The figure above shows Kaley’s marginal benefit from swimming with manatees and Scott’s marginal cost of providing manatee swimming tours. For Kaley and Scott, allocative efficiency is achieved at what point?

A) A

B) B

C) C

D) D

E) Either point A or point D

 

67) The figure above shows a nation’s production possibilities frontier. If the marginal cost equals the marginal benefit at point A when 4 million pizzas are produced,

A) allocative efficiency is achieved but production efficiency is not achieved because there are no tacos being produced.

B) both allocative and production efficiency are achieved.

C) production efficiency is achieved but allocative efficiency is not achieved because there are no tacos being produced.

D) production efficiency is achieved but allocative efficiency is not achieved because the number of tacos produced is at its absolute maximum.

E) neither allocative nor production efficiency has been achieved.

68) If a landlord will rent an apartment only to married couples over 30 years old, the landlord is allocating resources using a ________ allocation method.

A) majority rule

B) market price

C) contest

D) personal characteristics

E) command

 

69) Allocative efficiency occurs when

A) the most highly valued goods and services are produced.

B) all citizens have equal access to goods and services.

C) the environment is protected at all cost.

D) goods and services are free.

E) production takes place at any point on the PPF.

 

70) Marginal benefit equals the

A) benefit that a person receives from consuming another unit of a good.

B) additional efficiency from producing another unit of a good.

C) increase in profit from producing another unit of a good.

D) cost of producing another unit of a good.

E) total benefit from consuming all the units of the good or service.

 

71) In general, the marginal cost curve

A) has a positive slope.

B) has a negative slope.

C) is horizontal.

D) is vertical.

E) is U-shaped.

72) Allocative efficiency is achieved when the marginal benefit of a good

A) exceeds the marginal cost by as much as possible.

B) exceeds the marginal cost but not by as much as possible.

C) is less than the marginal cost.

D) equals the marginal cost.

E) equals zero.