Exam 2 Chapter 6 Flashcards
A price floor
Answers:
always results in a surplus.
always results in a shortage.
results in a surplus if the floor price is higher than the equilibrium price.
results in a shortage if the floor price is higher than the equilibrium price.
results in a surplus if the floor price is higher than the equilibrium price.
A price ceiling can result in which of the following? Answers: black markets increased search activities inefficiency All of the above answers are correct.
All of the above answers are correct.
A rent ceiling creates a shortage. As a result, which of the following occurs?
Answers:
only a loss of producer surplus for landlords
a gain of both consumer and producer surplus
a loss of both consumer and producer surplus
only a loss of consumer surplus for tenants
a loss of both consumer and producer surplus
Utilitarianism is the idea that only Answers: efficiency is fair. income equality is fair. efficiency brings equality. competition brings efficiency.
income equality is fair.
Marginal benefit is the benefit received from ________.
Answers:
consuming one more unit of a good or service
producing the efficient quantity
consuming more goods or services
consuming the efficient quantity
consuming one more unit of a good or service
When scarce resources can serve only one user at a time in sequence, which method works well for allocating the scarce resources? Answers: contest lottery first come, first served command system
first come, first served
Robert Nozick asserts that fairness and efficiency result if
Answers:
voluntary exchange occurs.
there are price ceilings in the market.
there are external benefits and external costs in the market.
public goods are provided by government.
voluntary exchange occurs.
Deadweight loss or welfare loss is
Answers:
made up of a loss of only consumer surplus.
made up of a loss of only producer surplus.
not a social loss.
made up of a loss of both consumer surplus and producer surplus.
made up of a loss of both consumer surplus and producer surplus.
Producer surplus is defined as the exchange price minus the supply price.
true or false?
true
Consider a market that has linear supply and demand curves, and is in equilibrium. The area above the price line and below the demand curve is Answers: marginal benefit. producer surplus. marginal cost. consumer surplus.
consumer surplus.
Jane is willing to pay $50 for a pair of shoes. The actual price of the shoes is $30. Her consumer surplus on this pair of shoes is
$20
Which of the following is a potential impact of an effective price ceiling?
Answers:
use of non-price factors such as discrimination to allocate the price-controlled good to consumers
a shortage
deterioration in the quality of the price-controlled good
All of the above are potential impacts of an effective price ceiling.
All of the above are potential impacts of an effective price ceiling.
A price ceiling is a price
Answers:
above which a seller cannot legally sell.
below which a seller cannot legally sell.
that creates a surplus of the good.
Both answers A and C are correct.
above which a seller cannot legally sell.
Demand price is the lowest price a consumer is willing to pay for a good.
true or false?
false
The assertion that if resources are allocated efficiently, they also are allocated fairly is made by
Answers:
Robert Nozick, who believes that equality of opportunity is fair.
all economists who understand the big tradeoff.
all utilitarians.
John Rawls, who proposed making the poorest as well off as possible.
Robert Nozick, who believes that equality of opportunity is fair.
