UNT ECON 1100 EXAM 2 FINAL
PREPARATION 2026 VERIFIED
SOLUTIONS INCLUDED
◉ Ceteris paribus, an effective (binding) price floor for a good leads to:
Answer: surpluses of the good.
◉ The efficient level of an activity is at the point where:
Answer: marginal benefit is equal to marginal cost.
◉ Marginal cost is:
Answer: the cost of producing one more unit of a good or service.
◉ A buyer gains consumer surplus when the market price:
Answer: is less than the maximum price the buyer is willing to pay.
◉ All of the following are sources of inefficiency except:
a. public goods. b. the invisible hand. c. external costs. d. price ceilings
Answer: the invisible hand.
◉ Refer to figure 1. The marginal benefit of the 200th unit is:
Answer: $10
◉ Refer to Figure 1. Consumer surplus when price is $20 is:
, Answer: $500
◉ Which of the following is the most correct statement about tax
burdens?
Answer: A tax burden falls most heavily on the side of the market that is
inelastic.
◉ An increase in the supply of lettuce, ceteris paribus, leads to a ___ in
the equilibrium price of lettuce, and consumer surplus to the lettuce
buyers will ___.
Answer: decrease; increase
◉ Refer to Figure 2. Under free market conditions, producer surplus will
be:
Answer: $50
◉ Refer to Figure 2. An effective (binding) price ceiling could be set at:
Answer: $10, which would create a shortage of 10 units.
◉ Goods that generate positive externalities tend to be ___, while goods
that generate negative externalities tend to be ___ by private markets
Answer: underproduced; overproduced
◉ When dealing with externalities, the market equilibrium can be
moved closer to the social optimum by:
PREPARATION 2026 VERIFIED
SOLUTIONS INCLUDED
◉ Ceteris paribus, an effective (binding) price floor for a good leads to:
Answer: surpluses of the good.
◉ The efficient level of an activity is at the point where:
Answer: marginal benefit is equal to marginal cost.
◉ Marginal cost is:
Answer: the cost of producing one more unit of a good or service.
◉ A buyer gains consumer surplus when the market price:
Answer: is less than the maximum price the buyer is willing to pay.
◉ All of the following are sources of inefficiency except:
a. public goods. b. the invisible hand. c. external costs. d. price ceilings
Answer: the invisible hand.
◉ Refer to figure 1. The marginal benefit of the 200th unit is:
Answer: $10
◉ Refer to Figure 1. Consumer surplus when price is $20 is:
, Answer: $500
◉ Which of the following is the most correct statement about tax
burdens?
Answer: A tax burden falls most heavily on the side of the market that is
inelastic.
◉ An increase in the supply of lettuce, ceteris paribus, leads to a ___ in
the equilibrium price of lettuce, and consumer surplus to the lettuce
buyers will ___.
Answer: decrease; increase
◉ Refer to Figure 2. Under free market conditions, producer surplus will
be:
Answer: $50
◉ Refer to Figure 2. An effective (binding) price ceiling could be set at:
Answer: $10, which would create a shortage of 10 units.
◉ Goods that generate positive externalities tend to be ___, while goods
that generate negative externalities tend to be ___ by private markets
Answer: underproduced; overproduced
◉ When dealing with externalities, the market equilibrium can be
moved closer to the social optimum by:
