Chapter 5_1: Efficiency and Equity

Chapter 5_1: Efficiency and Equity; Time: 40 phút

Question 1: All of the following statements about marginal benefit are correct EXCEPT
a. the marginal benefit of a good decreases as the quantity consumed of the good increases.
b. the marginal benefit of a good is equal to zero when resource use is efficient.
c. the marginal benefit of a good or service is measured as the maximum amount that a person is willing to pay for one more unit of it.
d. the marginal benefit is the benefit a person receives from consuming one more unit of a good or service.

Question 2: Sal likes to eat pizza. The ________ is the maximum amount that Sal is willing to pay for one piece of pizza.
a. marginal benefit
b. efficient price
c. efficient amount
d. marginal cost

Question 3: The principle of decreasing marginal benefit means that as the quantity of a good consumed
a. decreases, its marginal benefit decreases.
b. increases, its total benefit decreases.
c. increases, its marginal benefit decreases.
d. None of the above answers is correct.

Question 4: Marginal benefit typically
a. increases as marginal costs increase.
b. decreases as more is consumed.
c. increases as more is consumed.
d. remains constant as more is consumed.

Question 5: Marginal cost is the
a. opportunity cost of producing one more unit of a good or service.
b. maximum amount consumers are willing to pay for one more unit of a good or service.
c. extra benefit that people receive from producing one more unit of a good or service.
d. value of the least valuable thing given up to produce one more unit of a good or service.

Question 6: Marginal cost usually
a. remains constant as more is produced.
b. decreases as marginal benefits decrease.
c. increases as more is produced.
d. decreases as more is produced.

Question 7: Suppose a country produces only bikes and clothing. The country achieves an efficient allocation of resources when
a. it produces equal amount of bikes and clothes.
b. the prices charged for the goods are as low as possible.
c. it can't produce any more bikes unless it gives up clothing.
d. the marginal benefit of producing a bike equals the marginal cost of producing a bike.

Question 8: It is efficient to produce an additional shirt if
a. the marginal benefit of producing the shirt is greater than the marginal cost of producing it.
b. the marginal benefit of producing the shirt is greater than zero.
c. the marginal benefit of producing the shirt is zero.
d. total benefits from producing shirts are maximized.

Question 9: If the marginal benefit of the fifth slice of pizza is greater than the marginal cost of the fifth slice of pizza then the output level is
a. inefficient and less pizza should be produced.
b. inefficient and more pizza should be produced.
c. efficient and less pizza should be produced.
d. efficient and more pizza should be produced.

Question 10: When the efficient quantity of output is produced
a. the marginal benefit of the last unit produced is equal to the marginal cost of the last unit produced.
b. resources are used in the activities in which they are most highly valued.
c. the sum of consumer surplus and producer surplus is maximized.
d. All of the above answers are correct.

Question 11 - 15

Question 11: In the above figure, when the quantity equals 400 pretzels,
a. producers are willing to supply 400 pretzels for $2.
b. producers are willing to supply 400 pretzels for $3.
c. the marginal benefit is greater than the marginal cost.
d. consumers are willing to pay $2 for the 400th pretzel.

Question 12: The above figure shows that the maximum amount a person is willing to pay for the 400th pretzel
a. is less than the marginal benefit of the 400th pretzel.
b. is greater than the marginal cost of the 400th pretzel.
c. and the marginal benefit of the 400th pretzel are both $2.
d. is greater than the marginal benefit of the 200th pretzel.

Question 13: In the above figure, what is the marginal benefit of the four-hundredth pretzel?
a. $0
b. $3.00
c. $4.00
d. $2.00

Question 14: In the above figure, what is the marginal cost to the economy of producing the four-hundredth pretzel?
a. $2.00
b. $4.00
c. $0
d. None of the above answers are correct.

Question 15: In the above figure, what is the efficient quantity of pretzels to produce each day?
a. two hundred
b. three hundred
c. one hundred
d. four hundred

Question 16: In the above figure, if 300 pretzels are produced
a. resource use is efficient.
b. the marginal cost is greater than the marginal benefit.
c. the marginal benefit is greater than the marginal cost.
d. the marginal cost of another pretzel is 300.

Question 17

Question 17: In the above figure, what is the efficient quantity of hotdogs to produce?
a. 6 thousand per day
b. 2 thousand per day
c. 4 thousand per day
d. The efficient quantity cannot be determined without knowing the PPF for this economy.

Question 18-20

Question 18: In the above figure, the efficient quantity of magazines to produce per day is
a. more than 300,000 magazines.
b. 300,000 magazines.
c. 0, because that is where the marginal benefit exceeds the marginal cost by as much as possible.
d. more than 0 and less than 300,000 magazines.

Question 19: In the above figure, when the efficient quantity is produced the marginal cost of the last magazine is
a. $3.
b. $1.
c. $5.
d. some amount not given in the above three answers.

Question 20: In the above figure, when the efficient quantity is produced the marginal benefit of the last magazine is
a. $5.
b. $3.
c. $1.
d. some amount not given in the above three answers.

Question 21: The value of one more unit of a good or service is the
a. minimum price that people are willing to pay for another unit of the good or service.
b. marginal cost.
c. opportunity cost of producing one ore unit of a good or service.
d. marginal benefit.

Question 22: The value of a good is the
a. price you actually pay for it minus the maximum you are willing to pay for it.
b. maximum price you are willing to pay for it.
c. price that you actually pay for it.
d. maximum you are willing to pay for it minus the price you actually pay for it.

Question 23: Sam's demand curve for pizza
a. lies below her marginal benefit curve for pizza.
b. lies above her marginal benefit curve for pizza.
c. is the same as her marginal benefit curve for pizza.
d. has one point in common with her marginal benefit curve for pizza.

Question 24: The willingness to pay curve is the same as
a. the demand curve, but not the marginal benefit curve.
b. the demand curve and the marginal benefit curve.
c. neither the marginal benefit curve nor the demand curve.
d. the marginal benefit curve, but not the demand curve.

Question 25: As we move down along the demand curve for hot dogs,
a. the maximum price that people are willing to pay for hot dogs increases.
b. the marginal cost of hot dogs increases.
c. the consumer surplus of hot dogs increases.
d. the value of hot dogs decreases.

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