Question 1

Well-defined property rights:
A.can allow for mutually beneficial trades.
B.will result in government regulation.
C.often result in more market failures.
D.lead to more centralized decision making.

Accepted Answer

Well-defined property rights allow individuals to have clear ownership over resources and assets, which in turn allows for mutually beneficial trades and transactions to occur. This can lead to increased efficiency and productivity in a market economy. Government regulation may still be necessary to protect property rights and ensure fair competition, but well-defined property rights do not automatically result in more government intervention. Market failures can occur regardless of property rights, but clear ownership can help mitigate some types of market failures such as the tragedy of the commons. Well-defined property rights also do not necessarily lead to more centralized decision making, as ownership can be held by individuals or decentralized groups.

Question 2

(Table: Firm's Willingness) Look at the table Firm's Willingness.It explains the relation between the number of reports a firm is willing to produce and the lowest price it is willing to accept to prepare those reports.If the price of a report is $11, what is the value of producer surplus for this firm?
A.$11
B.$17
C.$27
D.$40

Accepted Answer

The answer of (Table: Firm's Willingness) Look at the table...

Question 3

(Table: Firm's Willingness) Look at the table Firm's Willingness.If the price of a report is $6, how many reports will be produced? 
A.5
B.4
C.3
D.2

Accepted Answer

The answer of  (Table: Firm's Willingness) Look at the...

Question 4

(Table: Willingness to Pay for Peanuts) Look at the table Willingness to Pay for Peanuts.If the price of a bag of peanuts is $2: 
A.every one of the consumers would purchase a bag.
B.everyone except Dave would purchase a bag.
C.everyone except George would purchase a bag.
D.no one would purchase a bag.

Accepted Answer

The answer of   (Table: Willingness to Pay for...

Question 5

A situation in which purchases do not occur because the value the potential seller places on the good exceeds the value a potential consumer places on the good will occur in:
A.a market dominated by government regulation.
B.well-functioning markets.
C.a market made up of many buyers and sellers.
D.a centralized market system.

Accepted Answer

The answer of A situation in which purchases do not...

Question 6

Markets work because they allocate sales to the potential sellers who most value the right to sell a good, as indicated by their ability to produce the good at the lowest cost.This statement illustrates:
A.producer surplus.
B.consumer surplus.
C.total surplus.
D.deadweight loss.

Accepted Answer

The answer of Markets work because they allocate sales to...

Question 7

(Table: Firm's Willingness) Look at the table Firm's Willingness.Which of the following market prices would result in four reports being produced? 
A.$2
B.$6
C.$8
D.$11

Accepted Answer

The answer of   (Table: Firm's Willingness) Look at...

Question 8

(Table: Willingness to Pay for Peanuts) Look at the table Willingness to Pay for Peanuts.If the price of a bag of peanuts is $6, what is the total value of consumer surplus?
A.$4
B.$3
C.$6
D.$10

Accepted Answer

The answer of (Table: Willingness to Pay for Peanuts) Look...

Question 9

Which of the following statements is true about market failures? I.A seller produces too much of the good at too high a price.II.Information is available to all decision makers.III.External costs are not considered in production decisions by producers.
A)Statement I is true. IV.
B)Statements I and II are true.
C)Statement III is true.
D)Statements I, II, and III are true.

Accepted Answer

Market failures occur when the market mechanism fails to allocate resources efficiently. Statement III is true because external costs, such as pollution or congestion, are often not included in the production decisions of producers. Statement I is not necessarily true as sellers may produce too little at too high a price, resulting in a shortage. Statement II is not always true as information may not be available or may be asymmetrically distributed among decision makers.

Question 10

(Table: Firm's Willingness) Look at the table Firm's Willingness.If the price of reports is $15, how many reports will the firm produce, and what will the producer surplus be?
A.one; $0
B.three; $23
C.5; $0
D.five; $33

Accepted Answer

The answer of (Table: Firm's Willingness) Look at the table...

Question 11

(Table: Firm's Willingness) Look at the table Firm's Willingness.If the price of a report is $12, what is the value of producer surplus for the firm?
A.$27
B.$21
C.$16
D.$42

Accepted Answer

The answer of (Table: Firm's Willingness) Look at the table...

Question 12

Figure: A Market in Equilibrium
(Figure: A Market in Equilibrium) Look at the figure A Market in Equilibrium.At the equilibrium price, this market's total producer and consumer surplus equals the area:
A.BCDG.
B.AIF.
C.DIF.
D.ADI.

Accepted Answer

The answer of Figure: A Market in Equilibrium
(Figure: A Market...

Question 13

Economic signals:
A.result in shortages and surpluses.
B.interfere with the trades that can be mutually beneficial.
C.guide decision makers in their transactions in the marketplace.
D.never provide adequate information to consumers.

Accepted Answer

Economic signals, such as prices and interest rates, provide important information to decision makers in the marketplace. They help individuals and businesses make informed decisions about what to buy, sell, or invest in, and they can help to allocate resources efficiently. While shortages and surpluses can result from imbalances in supply and demand, economic signals themselves do not cause these imbalances. Similarly, while some argue that certain economic policies may interfere with mutually beneficial trades, this is not an inherent property of economic signals themselves. Lastly, while economic signals may not always provide perfect or complete information to consumers, they are still an important source of information that consumers can use to make more informed choices.

Question 14

Figure: A Market in Equilibrium

Accepted Answer

The answer of Figure: A Market in Equilibrium...

Question 15

Well-functioning markets allow:
A.mutually beneficial trades to take place.
B.consumers to gain at the expense of producers.
C.producers to reap greater benefits, since they have greater power in the market.
D.property rights to be unnecessary components of effective distribution.

Accepted Answer

Well-functioning markets allow mutual beneficial trades to take place, meaning both consumers and producers are able to gain from the exchange. This promotes efficiency and optimal allocation of resources in the economy. B, C, and D are incorrect because they promote a one-sided gain for either the consumers or the producers, and ignore the importance of property rights in maintaining a functioning market.

Question 16

Figure: A Market in Equilibrium
   (Figure: A Market in Equilibrium) Look at the figure A Market in Equilibrium.At the equilibrium price, this market's producer surplus is equal to the area: 
A.ADI.
B.EHF.
C.AIF.
D.DIF.

Accepted Answer

The answer of Figure: A Market in Equilibrium
  ...

Quiz 4: Consumer and Producer Surplus

Well-defined property rights: A.can allow for mutually beneficial trades. B.will result in government regulation. C.often result in more market failures. D.lead to more centralized decision making.

(Table: Firm's Willingness) Look at the table Firm's Willingness.If the price of a report is $6, how many reports will be produced? A.5 B.4 C.3 D.2

Markets work because they allocate sales to the potential sellers who most value the right to sell a good, as indicated by their ability to produce the good at the lowest cost.This statement illustrates: A.producer surplus. B.consumer surplus. C.total surplus. D.deadweight loss.

(Table: Firm's Willingness) Look at the table Firm's Willingness.Which of the following market prices would result in four reports being produced? A.$2 B.$6 C.$8 D.$11

(Table: Willingness to Pay for Peanuts) Look at the table Willingness to Pay for Peanuts.If the price of a bag of peanuts is $6, what is the total value of consumer surplus? A.$4 B.$3 C.$6 D.$10

Which of the following statements is true about market failures? I.A seller produces too much of the good at too high a price.II.Information is available to all decision makers.III.External costs are not considered in production decisions by producers.

(Table: Firm's Willingness) Look at the table Firm's Willingness.If the price of reports is $15, how many reports will the firm produce, and what will the producer surplus be? A.one; $0 B.three; $23 C.5; $0 D.five; $33

(Table: Firm's Willingness) Look at the table Firm's Willingness.If the price of a report is $12, what is the value of producer surplus for the firm? A.$27 B.$21 C.$16 D.$42

Figure: A Market in Equilibrium (Figure: A Market in Equilibrium) Look at the figure A Market in Equilibrium.At the equilibrium price, this market's total producer and consumer surplus equals the area: A.BCDG. B.AIF. C.DIF. D.ADI.

Economic signals: A.result in shortages and surpluses. B.interfere with the trades that can be mutually beneficial. C.guide decision makers in their transactions in the marketplace. D.never provide adequate information to consumers.

Figure: A Market in Equilibrium

Well-functioning markets allow: A.mutually beneficial trades to take place. B.consumers to gain at the expense of producers. C.producers to reap greater benefits, since they have greater power in the market. D.property rights to be unnecessary components of effective distribution.

Figure: A Market in Equilibrium (Figure: A Market in Equilibrium) Look at the figure A Market in Equilibrium.At the equilibrium price, this market's producer surplus is equal to the area: A.ADI. B.EHF. C.AIF. D.DIF.