Consumers, Producers, and the Efficiency of Markets - Market

Consumers, Producers, and the Efficiency of Markets - Market

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University

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Nam N

Used 72+ times

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20 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which tools allow economists to determine if the allocation of resources determined by free markets is desirable?

profits and costs to firms

consumer and producer surplus

the equilibrium price and quantity

incomes of and prices paid by buyers

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Economists typically measure efficiency using

the price paid by buyers.

the quantity supplied by sellers.

total surplus

profits to firms.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following equations is not valid?

Consumer surplus = Value to buyers - Amount paid by buyers

Producer surplus = Amount received by sellers - Cost to sellers

Total surplus = Value to buyers - Amount paid by buyers + Amount received by sellers - Costs of sellers

Total surplus = Value to sellers - Cost to sellers

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

We can say that the allocation of resources is efficient if

producer surplus is maximized.

consumer surplus is maximized.

total surplus is maximized.

sellers’ costs are minimized.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Efficiency in a market is achieved when

a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs.

the sum of producer surplus and consumer surplus is maximized.

all firms are producing the good at the same low cost per unit.

no buyer is willing to pay more than the equilibrium price for any unit of the good.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

At the equilibrium price of a good, the good will be purchased by those buyers who

value the good more than price.

value the good less than price.

have the money to buy the good.

consider the good a necessity.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The distinction between efficiency and equality can be described as follows:

Efficiency refers to maximizing the number of trades among buyers and sellers; equality refers to maximizing the gains from trade among buyers and sellers.

Efficiency refers to minimizing the price paid by buyers;

equality refers to maximizing the gains from trade among buyers and sellers

Efficiency refers to maximizing the size of the pie; equality refers to producing a pie of a given size at the least possible cost.

Efficiency refers to maximizing the size of the pie; equality refers to distributing the pie fairly among members of society.

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