Economics MCQs

Page No. 353

Producer surplus is the area ?


a below the supply curve and above the price


bbelow the demand curve and above the supply curve


cbelow the demand curve and above the price


dabove the demand curve and below the price



An increase in the price of a good along a stationary demand curve ?


aimproves the material welfare of the buyers.


b decrease consumer surplus


cimproves market efficiency.


d increase consumer surplus.



A buyer’s willingness to pay is that buyer’s ?


aminimum amount they are willing to pay for a good


bproducer surplus.


c consumer surplus


dmaximum amount they are willing to pay for a good



Jamil has ten pairs of football boots and saleem has none. A pair of football boots cost Rs50. to produce. If jamil values an additional pair of boots at RS100 and saleem values a pair of boots at Rs40, then the maxime ?


aefficiency Saleem should receive the glove


b Efficiency Jamil should receive the glove


cequity Jamil should receive the glove


dconsumer surplus both should receive a glove



Medical care clearly enhance people’s lives. Therefore, we should consume medical care until ?


aeveryone has as much as they would like


b the benefit buyers place on medical care is equal to the cost of producing it


cbuyers receive no benefit from another unit of medical care.


dwe must cut back on the consumption of other goods.



If a market is efficient then_______?


a the market allocates buyers to the sellers who can produce the good at least cost


ball these answers


cnone of these answers


d the quantity produced in the market maximizes the sum of consumer and producer surplus


View Answer all these answers

In general, if a benevolent social planner wanted to maximize the total benefits received by buyers and sellers in a market, the planner should?


a choose a price below the market equilibrium price


ballow the market to seek equilibrium on its own.


cChoose any price the planner wants because the losses to the sellers (buyers) from any change in price are exactly offset by the gains to the buyers (sellers).


dchoose a price above the market equilibrium price



An increase in the price of a good along a stationary supply curve______________?


a increase producer surplus


b does all the things describe in these answers


c decrease producer surplus


dimproves market equity



Total surplus is the area_______________?


aabove the supply curve and below the price


bbelow the demand curve and above the price


cbelow the demand curve and above the supply curve


d above the demand curve and below the price



If a benevolent social planner chooses to produce more than the equilibrium quantity of a good, then ?


a the value placed on the last unit of production by buyers exceeds the cost of production


bthe cost of production on the last unit produced exceeds the value placed on it by buyers.


cconsumer surplus is maximized


dproducer surplus is maximized



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