Tackle the Test: Multiple-Choice Questions

1. Question

   At market equilibrium in a competitive market, which of the following is necessarily true?

   
   

   
   

   1. Consumer surplus is maximized.

      
      
   
   

   2. Producer surplus is maximized.

      
      
   
   

   3. Total surplus is maximized.

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I and II only

   E.

   I, II, and III

   At market equilibrium in a competitive market, which of the following is necessarily true?
2. Page 513

   Question

   Which of the following is true regarding equity and efficiency in competitive markets?

   A.

   Competitive markets ensure equity and efficiency.

   B.

   There is often a trade-off between equity and efficiency.

   C.

   Competitive markets lead to neither equity nor efficiency.

   D.

   There is generally agreement about the level of equity and efficiency in a market.

   E.

   None of the above

   Which of the following is true regarding equity and efficiency in competitive markets?

3. Question

   An excise tax imposed on sellers in a market will result in which of the following?

   
   

   
   

   1. an upward shift of the supply curve

      
      
   
   

   2. a downward shift of the demand curve

      
      
   
   

   3. deadweight loss

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I and III only

   E.

   I, II, and III

   An excise tax imposed on sellers in a market will result in which of the following?

4. Question

   An excise tax will be paid mainly by producers when

   A.

   it is imposed on producers.

   B.

   it is imposed on consumers.

   C.

   the price elasticity of supply is low and the price elasticity of demand is high.

   D.

   the price elasticity of supply is high and the price elasticity of demand is low.

   E.

   the price elasticity of supply is perfectly elastic.

   An excise tax will be paid mainly by producers when

5. Question

   When a competitive market is in equilibrium, total surplus can be increased by

   
   

   
   

   1. reallocating consumption among consumers.

      
      
   
   

   2. reallocating sales among sellers.

      
      
   
   

   3. changing the quantity traded.

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I, II, and III

   E.

   None of the above

   When a competitive market is in equilibrium, total surplus can be increased by