AcDec Economics FQ#6

Which of the following statements is NOT true of a competitive market at equilibrium?

• Society receives the maximum benefit.

• Buyers and sellers are satisfied.

• Total surplus is maximized.

• The outcome is Pareto efficient.

• Firms earn profits equal to producer surplus.

Which of the following statements BEST describes equilibrium?

• One force is always more dominant than others.

• All forces in a system are balanced.

• There are no measurable externalities that impact the system.

• All forces are measurable and quantifiable.

• The system is in a constant state of flux.

If market price exceeds equilibrium price, market price will decline. What factor explains this correlation?

• government intervention

• excess supply

• a lack of Pareto efficiency

• excess demand

• deadweight loss

Assume that the oil market is in equilibrium. What information does the price of oil communicate?

• marginal cost per unit of oil

• relative elasticity of oil supply

• consumer surplus for the oil market

• ease of entry into the market

• value that buyers place on oil

A car manufacturing company notices that many consumers are motivated by environmental concerns, so they start to produce EVs. What factor influenced this shift?

• tastes

• expectations

• input changes

• technology

• competition

How will the vaccine market be impacted if more producers enter the market?

• quantity of vaccines produced will remain the same

• demand for vaccines will decrease

• supply of vaccines will increase

• price of vaccines will increase

• elasticity of supply of vaccines will decrease

Which of the following inputs does a fashion company NOT require?

• machinery

• labor

• leather

• real estate

• taxes

Which benefit naturally arises from competitive market equilibrium?

• Everyone is allocated sufficient resources to survive.

• A competitive market will never produce negative externalities.

• A competitive market in equilibrium cannot be shifted.

• The market benefit of the producer and consumer is maximized.

• At competitive market equilibrium, there is no need for fiat currency.

If Joe is willing to pay $10 for a game ticket and the price is $20, what is his consumer surplus?

• $10

• $30

• -$30

• -$10

• $0

How is information conveyed in perfectly competitive markets?

• auction

• surplus

• opportunity costs

• consumer tastes

• price