Surplus MCQs

Option A: maximize producer surplus

Option B: are efficient

Option C: are inefficient

Option D: are equitable

Correct Answer: are inefficient ✔

Option A: are equitable.

Option B: are efficient

Option C: maximize consumer surplus

Option D: are inefficient

Correct Answer: are inefficient ✔

Option A: free market solutions are efficient

Option B: free market solutions maximize total surplus

Option C: all of these answers

Option D: free market solutions are equitable

Correct Answer: free market solutions are efficient ✔

Option A: maximizes total surplus

Option B: generates equality among the members of society

Option C: minimizes total surplus

Option D: both maximizes total surplus and generates equality among the members of society

Correct Answer: maximizes total surplus ✔

Option A: Rs500

Option B: Rs300

Option C: Rs200

Option D: Rs400

Correct Answer: Rs300 ✔

Option A: none of these answers.

Option B: the minimum amount the seller is willing to accept for a good

Option C: the seller’s producer surplus

Option D: the maximum amount the seller is willing to accept for a good

Correct Answer: the minimum amount the seller is willing to accept for a good ✔

Option A: total surplus is maximized

Option B: the value placed on the last unit production by buyers exceeds the cost of production.

Option C: producer surplus is maximized

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

Correct Answer: the value placed on the last unit production by buyers exceeds the cost of production. ✔

Option A: below the supply curve and above the price

Option B: below the demand curve and above the supply curve

Option C: below the demand curve and above the price

Option D: above the demand curve and below the price

Correct Answer: above the demand curve and below the price ✔

Option A: improves the material welfare of the buyers.

Option B: decrease consumer surplus

Option C: improves market efficiency.

Option D: increase consumer surplus.

Correct Answer: decrease consumer surplus ✔

Option A: minimum amount they are willing to pay for a good

Option B: producer surplus.

Option C: consumer surplus

Option D: maximum amount they are willing to pay for a good

Correct Answer: maximum amount they are willing to pay for a good ✔

Option A: efficiency Saleem should receive the glove

Option B: Efficiency Jamil should receive the glove

Option C: equity Jamil should receive the glove

Option D: consumer surplus both should receive a glove

Correct Answer: Efficiency Jamil should receive the glove ✔

Option A: everyone has as much as they would like

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

Option C: buyers receive no benefit from another unit of medical care.

Option D: we must cut back on the consumption of other goods.

Correct Answer: the benefit buyers place on medical care is equal to the cost of producing it ✔

Option A: the market allocates buyers to the sellers who can produce the good at least cost

Option B: all these answers

Option C: none of these answers

Option D: the quantity produced in the market maximizes the sum of consumer and producer surplus

Correct Answer: all these answers ✔

Option A: choose a price below the market equilibrium price

Option B: allow the market to seek equilibrium on its own.

Option 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 (sellers).

Option D: choose a price above the market equilibrium price

Correct Answer: allow the market to seek equilibrium on its own. ✔

Option A: increase producer surplus

Option B: does all the things describe in these answers

Option C: decrease producer surplus

Option D: improves market equity

Correct Answer: increase producer surplus ✔

Option A: above the supply curve and below the price

Option B: below the demand curve and above the price

Option C: below the demand curve and above the supply curve

Option D: below the supply curve and above the price

Correct Answer: below the demand curve and above the supply curve ✔

Option A: the value placed on the last unit of production by buyers exceeds the cost of production

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

Option C: consumer surplus is maximized

Option D: total surplus is maximized

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

Option A: Three vases will be sold, and consumer surplus is Rs80

Option B: One vase will be sold, and consumer surplus is Rs5.

Option C: One vase will be sold, and consumer surplus is Rs30.

Option D: Three vases will be sold, and consumer surplus is Rs0.

Correct Answer: Two vases will be sold, and consumer surplus is Rs5. ✔

Option A: Rs18,000

Option B: Rs20,000

Option C: Rs2,000

Option D: Rs0.

Correct Answer: Rs2,000 ✔

Option A: below the demand curve and above the price.

Option B: above the supply curve and below the price.

Option C: above the demand curve and below the price.

Option D: below the supply curve and above the price.

Correct Answer: below the demand curve and above the price. ✔