MICRO SB #4/5

The supply curve for any good, private or public is ______. Multiple choice question. its marginal-cost curve its marginal-revenue curve its total-revenue curve its total-cost curve

marginal-cost curve

What is it called when demand fails to account for the buyer's full willingness to pay? Multiple choice question. An insufficient-demand curve Supply-side market failure Demand-side market failure A public-demand curve

Demand-side market failure

Which of the following explains how the government provides the optimal quantity of a public good? Multiple choice question. It compares the marginal benefit of an added unit of the good against the government's total cost of providing it. It compares the marginal benefit of an added unit of the good against the government's marginal cost of providing it. It compares the total benefit of an added unit of the good against the government's total cost of providing it. It compares the total benefit of an added unit of the good against the government's marginal cost of providing it.

It compares the marginal benefit of an added unit of the good against the government's marginal cost of providing it.

What are the effects of taxation on resources? Multiple select question. It eliminates resources from use in producing both public and private goods. It makes resources available for producing public goods. It shifts resources from the production of public goods to the production of private goods. It reduces private demand for resources.

It makes resources available for producing public goods. It reduces private demand for resources

The government can provide the efficient amount of a public good by adhering to which of the following rules? Multiple choice question. Total benefit equals total cost Marginal benefit equals marginal cost Marginal benefit is less than marginal cost Total benefit is less than total cost

Marginal benefit equals marginal cost

Which of the following are signs of a market failure? Multiple select question. High demand for goods Overallocation of resources Underallocation of resources

Overallocation of resources Underallocation of resources

What is the difference between the actual price a seller receives and the minimum acceptable price? Multiple choice question. Extra surplus Consumer surplus Producer profit Producer surplus

Producer surplus

When do demand-side market failures occur? Multiple choice question. When demand curves underreport how much consumers are willing and able to pay for a product When the demand for a given product falls in response to defects or design flaws When supply curves overreport the quantity of a product that producers are willing to provide at a given price When the equilibrium price is above the socially optimum level

When demand curves underreport how much consumers are willing and able to pay for a product

When is allocative efficiency of a product achieved? Multiple choice question. When the per-unit cost of the product is minimized When demand for the product peaks When the benefit of additional production is less than the opportunity cost of redirecting those resources When the correct quantity of the product is produced relative to other goods and services

When the correct quantity of the product is produced relative to other goods and services

In a supply and demand chart for a public good, which of the following equates to a marginal-benefit curve? Multiple choice question. Price vector Optimal quantity Supply curve Willingness-to-pay curve

Willingness-to-pay curve

A comparison of the marginal cost of a project or program with the marginal benefits is known as ______. Multiple choice question. a cost-benefit analysis a total revenue analysis a demand analysis the peter principle

a cost-benefit analysis

A form of economic efficiency called _______ is achieved when resources are directed toward their highest-valued use.

allocative efficiency

A form of economic efficiency called is achieved when resources are directed toward their highest-valued use

allocative efficiency

A cost-_______ analysis involves an assessment of marginal costs and marginal benefits associated with a project or program

benefit

Which of the following would be considered private goods? Multiple select question. National defense Clothing Street lighting Automobiles

clothing and automobiles comp and rivalry

__ is defined as the difference between the maximum price a consumer is willing to pay for a product and the actual price. Multiple choice question. Product surplus Deadweight loss Consumer surplus Producer surplus

consumer surplus

The supply curve for a public good is society's marginal ______ curve.

cost

Which of the following refers to reductions of combined consumer and producer surplus associated with the underproduction or overproduction of a good or service? Multiple choice question. Inefficiency loss Triangle loss Surplus loss Deadweight loss

deadweight loss

Government failure refers to ______. Multiple choice question. economically efficient outcomes caused by shortcomings in the public sector economically inefficient outcomes caused by shortcomings in the public sector economically efficient outcomes in the private sector economically inefficient outcomes caused by shortcomings in the private sector

economically inefficient outcomes caused by shortcomings in the public sector

A cost or a benefit accruing to an individual or group that is external to a market transaction is known as a(n) ______. Multiple choice question. internal cost externality producer surplus deadweight loss

externality

A(n) is a cost or a benefit accruing to an individual or a group, a third party, that is external to a market transaction. (Enter one word in the blank.)

externality

A person who receives benefits from a market transaction without having to pay for them is called a(n) rider.

free

People who receive the benefits from a good without having to pay for it are known as ______. Multiple choice question. arbitrages moral hazards underallocators free riders

free riders

____ failure refers to economically inefficient outcomes caused by shortcomings in the public sector.

government

failure refers to economically inefficient outcomes caused by shortcomings in the public sector.

government

The supply curve for any good, private or public is ______. Multiple choice question. its total-revenue curve its marginal-cost curve its total-cost curve its marginal-revenue curve

its marginal-cost curve

The downward-sloping willingness-to-pay curves for public goods are also known as ______. Multiple choice question. total-benefit curves marginal-cost curves marginal-benefit curves marginal-revenue curves total-cost curve

marginal-benefit curves

Which term describes the inability of a market to bring about the allocation of resources that best satisfies the wants of society? Multiple choice question. Consumer deficit Economic recession Market failure Imperfect competition

market failure

Consumer surplus is the difference between the ___ price a consumer is willing to pay for a product and the price paid. Multiple choice question. maximum equilibrium minimum actual

max

A market failure that occurs when a third party to a transaction experiences uncompensated costs is called a(n) _____ externality, or spillover cost.

negative

If a market transaction imposes an uncompensated cost on a third party not directly involved in the transaction, the transaction results in a market failure known as a ______. Multiple choice question. spillover benefit negative externality market intervention positive externality

negative externality

_____ _____ is the difference between the actual price a seller receives and the minimum acceptable price. (Enter one word in each blank.)

peoducer surplus

What is the difference between the actual price a seller receives and the minimum acceptable price? Multiple choice question. Producer surplus Producer profit Consumer surplus Extra surplus

producer surplus

If a good is nonrival and nonexcludable then it is known as a(n) _____ good.

public

If a good is nonrival and nonexcludable, then it is known as a: quasi-public good private good public good

public good

A good that could be produced by the market system (since exclusion is possible), but government provides it in order to avoid an underallocation of resources is called a(n) ______ public good.

quasi

A good that could be produced by the market system (since exclusion is possible) but government provides to avoid an underallocation of resources is called a:

quasi-public good

Which of the following diverts purchasing power from private spenders to government, thereby removing resources from private use? Multiple choice question. Inflation Interest rates Taxation Savings

taxation

True or false: Efficiency losses are reductions of combined consumer surplus and producer surplus associated with either underproduction or overproduction of a product. True false question. True Falste

true