Stocks & Surplus Economics Mcqs - Set 4

1)   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 ?

a. efficiency Saleem should receive the glove
b. Efficiency Jamil should receive the glove
c. equity Jamil should receive the glove
d. consumer surplus both should receive a glove
Answer  Explanation 

ANSWER: Efficiency Jamil should receive the glove

Explanation:
No explanation is available for this question!


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

a. everyone has as much as they would like
b. the benefit buyers place on medical care is equal to the cost of producing it
c. buyers receive no benefit from another unit of medical care.
d. we must cut back on the consumption of other goods.
Answer  Explanation 

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

Explanation:
No explanation is available for this question!


3)   If a market is efficient then_______?

a. the market allocates buyers to the sellers who can produce the good at least cost
b. all these answers
c. none of these answers
d. the quantity produced in the market maximizes the sum of consumer and producer surplus
e. the market allocates output to the buyers that value it the most
Answer  Explanation 

ANSWER: all these answers

Explanation:
No explanation is available for this question!


4)   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
b. allow the market to seek equilibrium on its own.
c. Choose 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 (
d. choose a price above the market equilibrium price
Answer  Explanation 

ANSWER: allow the market to seek equilibrium on its own.

Explanation:
No explanation is available for this question!


5)   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
d. improves market equity
Answer  Explanation 

ANSWER: increase producer surplus

Explanation:
No explanation is available for this question!


6)   Total surplus is the area_______________?

a. above the supply curve and below the price
b. below the demand curve and above the price
c. below the demand curve and above the supply curve
d. below the supply curve and above the price
e. above the demand curve and below the price
Answer  Explanation 

ANSWER: below the demand curve and above the supply curve

Explanation:
No explanation is available for this question!


7)   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
b. the cost of production on the last unit produced exceeds the value placed on it by buyers.
c. consumer surplus is maximized
d. total surplus is maximized
e. producer surplus is maximized
Answer  Explanation 

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

Explanation:
No explanation is available for this question!


8)   Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay Rs30 for one, buyer 2 is willing to pay Rs25 for one, and buyer 3 is willing to pay Rs20 for one. If the price is Rs25, how many vases will be sold and what is the value of consumer surplus in this market ?

a. Three vases will be sold, and consumer surplus is Rs80
b. One vase will be sold, and consumer surplus is Rs5.
c. One vase will be sold, and consumer surplus is Rs30
d. Three vases will be sold, and consumer surplus is Rs0.
e. Two vases will be sold, and consumer surplus is Rs5.
Answer  Explanation 

ANSWER: Two vases will be sold, and consumer surplus is Rs5.

Explanation:
No explanation is available for this question!


9)   If a buyer’s willingness to pay for a new Honda is Rs20,000 and she is able to actually buy it for Rs18,000 her consumer surplus is ?

a. Rs18,000
b. Rs20,000
c. Rs2,000
d. Rs0.
Answer  Explanation 

ANSWER: Rs2,000

Explanation:
No explanation is available for this question!


10)   Consumer surplus is the area ?

a. below the demand curve and above the price.
b. above the supply curve and below the price.
c. above the demand curve and below the price.
d. below the supply curve and above the price.
e. below the demand curve and above the supply curve
Answer  Explanation 

ANSWER: below the demand curve and above the price.

Explanation:
No explanation is available for this question!