Micro Quiz 5

Due 16 Sep at 23:59 Points 30 Questions 15

Available 4 Sep at 12:00 - 16 Sep at 23:59 Time limit 25 Minutes
Allowed attempts 3

Instructions
This quiz consists of 15 questions to be completed in 25 minutes.

You have 3 attempts. Your highest score will count towards your grade.

Take the quiz again

Attempt history
Attempt Time Score
LATEST Attempt 1 15 minutes 30 out of 30

 Correct answers are hidden.

Score for this attempt: 30 out of 30

Submitted 10 Sep at 17:10
This attempt took 15 minutes.

Question 1 2 / 2 pts

If Pietro's Pizza Parlor knows that the marginal cost of the 500th pizza
is $3.00, and that the average total cost of making 499 pizzas is $3.30,
then

the average total cost of making 500 pizzas is $3.00.

the average total cost is rising at Q = 500.

the average total cost is flat at Q = 500.

Course chat 
 
the total cost is falling at Q = 500. 15/08/23

the average total cost is falling at Q = 500. LJ LI JIAN 15/08/23 11:43

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Question 2
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Suppose the market for vaccinations is perfectly competitive.
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government intervention in the vaccination market, which of the
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following statements is correct?

I. At the equilibrium quantity, the social marginal

 benefit exceeds the 
private marginal cost.

II. The equilibrium quantity is efficient because the market is perfectly

competitive.

III. A per-shot subsidy could turn an inefficient situation into an efficient

one.

I only

I and III only

II and III only

III only

Neither I, II, nor III

II only

I and II only

I, II, and III

 What are the characteristics of vaccinations? What do terms like
"social marginal benefit" and "private marginal cost" suggest?
Draw the graph, and identify the equilibrium quantity.

Question 3 2 / 2 pts

Which of the following rules is most consistent with profit maximization?

Reduce output when TR > TC.

Reduce output when MR < P.

Expand output when MR < MC.

Expand output when MR > MC.

Expand output when TR > TC.

What is the profit maximization rule?

Question 4 2 / 2 pts

Four friends decide to meet at Din Tai Fung for dinner. They decide that
each person will order an item off the menu, and they will share all the
dishes. They will split the cost of the bill evenly. A tragedy of the
commons problem is likely for each of the following reasons except
 when one person eats, he may not take into account how his decision
affects his friends.

each dish would be both excludable and rival in consumption.

the food on the table resembles a common resource.

each person has an incentive to eat as fast as possible since their

individual rate of consumption will not affect their individual cost.

there is an externality associated with eating the food on the table.

What is the tragedy of the commons?

Question 5 2 / 2 pts

If the marginal cost and marginal revenue curves intersect at two

different points, then maximum profit occurs at

an output level beyond the two points.

the output level where the MC curve intersects the MR curve from
below.

the output level where the MC curve intersects the MR curve from
above.

both points.

an output level between the two points.

 Draw a graph where MC and MR intersect at two different
points. Consider the profit at each point.

Question 6 2 / 2 pts

Why has the value of ivory threatened the extinction of the elephant,
whereas the value of beef has enhanced the survival of the cow?

Cows are private goods, while elephants are public goods.

Elephants are larger than cows, and require more economic resources.

Elephants are a common resource, whereas cows are privately owned.

Elephants live in Africa, where economic resources are scarce.

Cows are a common resource, whereas elephants lie under the

jurisdiction of governments.

How are elephants characterized? How are cows

characterized?

Question 7 2 / 2 pts

The privately-owned school system in Smalltown has virtually unlimited

capacity. It accepts all applicants and operates on both tuition and
private donations. Although every resident values having an educated
community, the school?s revenues have suffered lately due to a large
decline in private donations from the elderly population. Which of the
following statements is not correct?

The private market is the best way to supply education.

The social benefit of education exceeds the private benefit.

The government could potentially help the market reach a socially

optimal level of education.

The free-rider problem causes the private market to undersupply

education to the community.

A tax increase to pay for education could potentially make the

community better off.

What are the characteristics of education? What are the

characteristics of a privately-owned school system?

Question 8 2 / 2 pts

A $20 subsidy granted to a hospital for each individual vaccinated

would benefit

the hospital more than the individual if supply were more elastic than
demand.

the hospital more than the individual if demand were more elastic than
supply.
 the individual and the hospital in such a way that they would each get
$20.

only the hospital since they are the direct beneficiaries.

the individual and the hospital in such a way that they would each get
$10.

Draw a graph where demand is more elastic than supply; who

benefits more?

Draw a graph where supply is more elastic than demand; who

benefits more?

Question 9 2 / 2 pts

The figure below represents the tobacco industry. If the government

decides to impose a pollution tax, how much should the per unit tax
be?

$0.20

$0.35
 $1.80

$0.30

$1.90

$1.60

What is the competitive market outcome? What is the socially

optimal outcome?

Question 10 2 / 2 pts

Last month, Sally spent $30,000 to repair her old car. Now her car
requires an additional $20,000 in repairs. She could get a comparable
car for $25,000. She should

repair her car because the money she has already spent repairing the
car ($30,000) exceeds the price of the new car ($25,000).

buy a new car because the price of the new car ($25,000) is less than
the total amount she would spend on her current car ($50,000).

repair her car since the cost of repairing it is lower than the cost of
buying another car.

repair her car or buy a comparable one because the opportunity costs
are the same.

buy a new car because sunk costs should be ignored in decision

making.
 Can Sally do anything about the $30,000 she spent last month
repairing her old car?

Question 11 2 / 2 pts

What is true only at the output level where price equals average total
cost?

Marginal cost equals marginal revenue.

Losses are minimized.

Cost is minimized.

Profit is zero.

Profit is maximized.

What is the formula for average total cost? What is the formula
for profit?

Question 12 2 / 2 pts

A firm in a perfectly competitive market

determines the price of its output but not the quantity of its output.

determines the quantity of its output but not the price of its output.
 determines neither the price of its output nor the quantity of its output.

determines both the price of its output and the quantity of its output.

What are the characteristics of a firm in a perfectly competitive

market?

Question 13 2 / 2 pts

Consider the following problems: overcrowded highways, overfishing,

polluted air, and the near-extinction of the rhinoceros. What would an
economist say about these problems?

The problems are all the result of a failure of regulation.

The problems are all the result of a failure to establish clear property
rights over something of value.

The problems would all go away if the government sponsored an

intensive public information campaign.

The problems are all the result of a failure of corrective taxes.

Private markets would easily solve these problems if governments left

the markets alone.

What sort of characteristics do overcrowded highways have?

Fishing? Pollution? The rhinoceros?
Question 14 2 / 2 pts

Asteroid protection is

excludable and non-rival.

non-excludable and rival.

excludable and rival.

non-excludable and non-rival.

Are you protected if you do not pay for asteroid protection?

Does your degree of protection depend on how many others are

protected?

Question 15 2 / 2 pts

Leah and Rebecca are roommates. Leah likes to study with loud music
while Rebecca needs peace and quiet when she studies. Leah would
be willing to pay $5 a night to listen to music while Rebecca would be
willing to pay $10 a night for peace and quiet.

Rebecca should pay Leah $2.50 a night to not listen to music.

Rebecca should pay Leah $7.50 a night to not listen to music.

Leah should pay Rebecca $7.50 a night to listen to music.

Leah should pay Rebecca $15.00 a night to listen to music.

 Neither of them should have to pay.

What is Leah's willingness to pay (to listen to music)? What is

Rebecca's willingness to pay (to have peace and quiet)?

Quiz score: 30 out of 30