Question :
31) The “invisible hand” refers to the notion that
A) competitive : 1239090
31) 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.
32) 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.
33) 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.
34) 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.
35) At a competitive equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities,
A) the marginal benefit is greater than the marginal cost.
B) resource use is efficient.
C) the marginal benefit is less than the marginal cost.
D) both the marginal benefit and the marginal cost of the last unit produced equal zero.
E) the marginal benefit is greater than the marginal cost by as much as possible.
36) At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities,
i.consumer surplus is minimized.
ii.marginal cost equals marginal benefit.
iii.resources are efficiently used.
iv.producer surplus is minimized.
A) ii and iii
B) i and ii
C) i and iv
D) i, ii, iii, and iv
E) ii only
37) When technology increases the supply of a good and lower prices increase the quantity demanded,
A) the economy is reallocating resources to achieve an efficient allocation.
B) consumer surplus falls.
C) the invisible hand is unnecessary.
D) the marginal benefit of the good increases with the quantity produced.
E) the economy is no longer efficient because the quantity changes.
38) When output is less than the efficient level,
A) consumers are willing to pay more for another unit than it costs to produce the unit.
B) the amount consumers are willing to pay equals the cost of production.
C) the cost of production is greater than the price consumers are willing to pay.
D) the production costs can’t be measured.
E) the marginal cost of producing the good must be greater than the marginal benefit from the good.
39) When there is market failure so that a market produces less than the efficient amount,
A) consumer surplus definitely is larger than when the efficient quantity is produced.
B) the sum of producer surplus and consumer surplus is larger than when the efficient quantity is produced.
C) there is a deadweight loss.
D) consumers definitely lose and producers definitely gain.
E) consumers definitely gain and producers definitely lose.
40) A quantity less than the equilibrium quantity in a competitive market is inefficient because
A) the marginal benefit of another unit is greater than its marginal cost.
B) too much of the good is being produced.
C) the marginal cost of another unit is greater than its marginal benefit.
D) the marginal benefit of another unit is not equal to zero.
E) the marginal benefit is not maximized.
