ECON 201 QUESTION BANK
1. Which tools allow economists to determine if the allocation of resources determined by free markets is
desirable?
a. profits and costs to firms
b. consumer and producer surplus
c. the equilibrium price and quantity
d. incomes of and prices paid by buyers
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 001.07.3 - MC - MANK08
2. Economists typically measure efficiency using
a. the price paid by buyers.
b. the quantity supplied by sellers.
c. total surplus.
d. profits to firms.
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
Efficiency
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 002.07.3 - MC - MANK08
3. Consumer surplus equals the
a. value to buyers minus the amount paid by buyers.
b. value to buyers minus the cost to sellers.
c. amount received by sellers minus the cost to sellers.
d. amount received by sellers minus the amount paid by buyers.
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Consumer surplus
Welfare economics
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 003.07.3 - MC - MANK08
4. Producer surplus equals the
a. value to buyers minus the amount paid by buyers.
b. value to buyers minus the cost to sellers.
c. amount received by sellers minus the cost to sellers.
, d. amount received by sellers minus the amount paid by buyers.
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
Producer surplus
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 004.07.3 - MC - MANK08
5. Total surplus
a. can be used to measure a market’s efficiency.
b. is the sum of consumer and producer surplus.
c. is the value to buyers minus the cost to sellers.
d. All of the above are correct.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 005.07.3 - MC - MANK08
6. Total surplus is
a. the total cost to sellers of providing the good minus the total value of the good to
buyers.
b. the total value of the good to buyers minus the cost to sellers of providing the good.
c. the difference between consumer surplus and sellers’ cost.
d. always smaller than producer surplus.
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 006.07.3 - MC - MANK08
7. Total surplus is
a. equal to consumer surplus minus producer surplus.
b. equal to the total value to buyers minus the total cost to sellers.
c. equal to consumers' willingness to pay plus producers’ cost.
d. greater than the sum of consumer surplus plus producer surplus.
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
,TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 007.07.3 - MC - MANK08
8. Total surplus is equal to
a. value to buyers - profit to sellers.
b. value to buyers - cost to sellers.
c. consumer surplus x producer surplus.
d. (consumer surplus + producer surplus) x equilibrium quantity.
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 008.07.3 - MC - MANK08
9. Total surplus in a market is equal to
a. value to buyers - amount paid by buyers.
b. amount received by sellers - costs of sellers.
c. value to buyers - costs of sellers.
d. amount received by sellers - amount paid by buyers.
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 009.07.3 - MC - MANK08
10. Total surplus in a market is equal to
a. consumer surplus + producer surplus.
b. value to buyers - amount paid by buyers.
c. amount received by sellers - costs of sellers.
d. producer surplus - consumer surplus.
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 010.07.3 - MC - MANK08
11. Total surplus is represented by the area
a. under the demand curve and above the price.
, b. above the supply curve and up to the price.
c. under the supply curve and up to the price.
d. between the demand and supply curves up to the point of equilibrium.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 011.07.3 - MC - MANK08
12. Total surplus is represented by the area below the
a. demand curve and above the price.
b. price and up to the point of equilibrium.
c. demand curve and above the supply curve, up to the equilibrium quantity.
d. demand curve and above the horizontal axis, up to the equilibrium quantity.
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 012.07.3 - MC - MANK08
13. Which of the following is correct?
a. Consumer surplus refers to a situation in which there are more buyers than sellers in a market.
b. Producer surplus refers to a situation in which there are more sellers than buyers in a market.
c. Total surplus is measured as the area below the demand curve and above the supply curve, up
to the equilibrium quantity.
d. All of the above are correct.
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 013.07.3 - MC - MANK08
14. We can say that the allocation of resources is efficient if
a. producer surplus is maximized.
b. consumer surplus is maximized.
c. total surplus is maximized.
d. sellers’ costs are minimized.
ANSWER: c
DIFFICULTY: Moderate
1. Which tools allow economists to determine if the allocation of resources determined by free markets is
desirable?
a. profits and costs to firms
b. consumer and producer surplus
c. the equilibrium price and quantity
d. incomes of and prices paid by buyers
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 001.07.3 - MC - MANK08
2. Economists typically measure efficiency using
a. the price paid by buyers.
b. the quantity supplied by sellers.
c. total surplus.
d. profits to firms.
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
Efficiency
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 002.07.3 - MC - MANK08
3. Consumer surplus equals the
a. value to buyers minus the amount paid by buyers.
b. value to buyers minus the cost to sellers.
c. amount received by sellers minus the cost to sellers.
d. amount received by sellers minus the amount paid by buyers.
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Consumer surplus
Welfare economics
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 003.07.3 - MC - MANK08
4. Producer surplus equals the
a. value to buyers minus the amount paid by buyers.
b. value to buyers minus the cost to sellers.
c. amount received by sellers minus the cost to sellers.
, d. amount received by sellers minus the amount paid by buyers.
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
Producer surplus
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 004.07.3 - MC - MANK08
5. Total surplus
a. can be used to measure a market’s efficiency.
b. is the sum of consumer and producer surplus.
c. is the value to buyers minus the cost to sellers.
d. All of the above are correct.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 005.07.3 - MC - MANK08
6. Total surplus is
a. the total cost to sellers of providing the good minus the total value of the good to
buyers.
b. the total value of the good to buyers minus the cost to sellers of providing the good.
c. the difference between consumer surplus and sellers’ cost.
d. always smaller than producer surplus.
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 006.07.3 - MC - MANK08
7. Total surplus is
a. equal to consumer surplus minus producer surplus.
b. equal to the total value to buyers minus the total cost to sellers.
c. equal to consumers' willingness to pay plus producers’ cost.
d. greater than the sum of consumer surplus plus producer surplus.
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
,TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 007.07.3 - MC - MANK08
8. Total surplus is equal to
a. value to buyers - profit to sellers.
b. value to buyers - cost to sellers.
c. consumer surplus x producer surplus.
d. (consumer surplus + producer surplus) x equilibrium quantity.
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 008.07.3 - MC - MANK08
9. Total surplus in a market is equal to
a. value to buyers - amount paid by buyers.
b. amount received by sellers - costs of sellers.
c. value to buyers - costs of sellers.
d. amount received by sellers - amount paid by buyers.
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 009.07.3 - MC - MANK08
10. Total surplus in a market is equal to
a. consumer surplus + producer surplus.
b. value to buyers - amount paid by buyers.
c. amount received by sellers - costs of sellers.
d. producer surplus - consumer surplus.
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 010.07.3 - MC - MANK08
11. Total surplus is represented by the area
a. under the demand curve and above the price.
, b. above the supply curve and up to the price.
c. under the supply curve and up to the price.
d. between the demand and supply curves up to the point of equilibrium.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 011.07.3 - MC - MANK08
12. Total surplus is represented by the area below the
a. demand curve and above the price.
b. price and up to the point of equilibrium.
c. demand curve and above the supply curve, up to the equilibrium quantity.
d. demand curve and above the horizontal axis, up to the equilibrium quantity.
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 012.07.3 - MC - MANK08
13. Which of the following is correct?
a. Consumer surplus refers to a situation in which there are more buyers than sellers in a market.
b. Producer surplus refers to a situation in which there are more sellers than buyers in a market.
c. Total surplus is measured as the area below the demand curve and above the supply curve, up
to the equilibrium quantity.
d. All of the above are correct.
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.014 - Assess a market's efficiency.
TOPICS: Welfare economics
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 013.07.3 - MC - MANK08
14. We can say that the allocation of resources is efficient if
a. producer surplus is maximized.
b. consumer surplus is maximized.
c. total surplus is maximized.
d. sellers’ costs are minimized.
ANSWER: c
DIFFICULTY: Moderate
