Q3. According to the “invisible hand” principle, which of the following statements is least accurate?

A)   Efficient allocation of productive resources occurs through competition.

B)   Producers serve society’s interest by serving their own self-interest.

C)   The authority of the state, although not seen, must always be present in the market.

Q4. Consider the following two final consumer goods:

Good W requires the inputs of raw material R and intermediate goods S and T.
Good X requires the inputs of raw material R and intermediate goods U and V.

If demand for Good W increases and demand for Good X decreases, which of the following outcomes is least likely?

A)   More resources will be devoted to producing Good W and less to producing Good T.

B)   Some of raw material R will be diverted away from the producers of Good X.

C)   The price of Good U will decrease and the price of Good S will increase.

Q5. Which of the following statements regarding deadweight loss is least accurate?

A)   Deadweight loss from underproduction leads to a loss of producer surplus but not consumer surplus.

B)   An overproduction of goods can lead to a reduction in consumer surplus.

C)   Deadweight loss occurs when the quantity supplied does not maximize the sum of consumer and producer surplus.

Q6. Christine Dobbs is watching a public affairs television program on which one of the participants makes the following statements:

Statement 1: A common resource is an obstacle to the efficient allocation of resources unless it generates external benefits.

Statement 2: The idea of utilitarianism suggests that market allocation of resources does not maximize the value of an economy to all individuals. However, achieving the results that utilitarianism regards as optimal involves a loss of economic output.

With respect to these statements:

A)   only one is correct.

B)   both are correct.

C)   both are incorrect.

答案和详解如下：

Q3. According to the “invisible hand” principle, which of the following statements is least accurate?

A)   Efficient allocation of productive resources occurs through competition.

B)   Producers serve society’s interest by serving their own self-interest.

C)   The authority of the state, although not seen, must always be present in the market.

Correct answer is C)

The “invisible hand” to which Adam Smith referred in The Wealth of Nations did not include any legal authority. Rather, Smith was describing the way that individual producers serve society’s interest by competing with one another to produce the goods and services that are valued most highly by final consumers, even though the producers do not have society’s interest explicitly in mind.

Q4. Consider the following two final consumer goods:

Good W requires the inputs of raw material R and intermediate goods S and T.
Good X requires the inputs of raw material R and intermediate goods U and V.

If demand for Good W increases and demand for Good X decreases, which of the following outcomes is least likely?

A)   More resources will be devoted to producing Good W and less to producing Good T.

B)   Some of raw material R will be diverted away from the producers of Good X.

C)   The price of Good U will decrease and the price of Good S will increase.

Correct answer is A)

If demand for Good W increases and demand for Good X decreases, the market will allocate more resources to producing Good W and the goods that go into producing Good W (that is, Good S and Good T), and less to producing Good X and the goods that go into producing Good X (that is, Good U and Good V). Changes in the relative prices of all these goods are the signal that tells their producers where to direct resources. Prices will increase for goods W, S and T while prices decrease for Goods X, U and V.

Q5. Which of the following statements regarding deadweight loss is least accurate?

A)   Deadweight loss from underproduction leads to a loss of producer surplus but not consumer surplus.

B)   An overproduction of goods can lead to a reduction in consumer surplus.

C)   Deadweight loss occurs when the quantity supplied does not maximize the sum of consumer and producer surplus.

Correct answer is A)

Deadweight loss is the reduction in consumer and producer surplus due to underproduction or overproduction.

Q6. Christine Dobbs is watching a public affairs television program on which one of the participants makes the following statements:

Statement 1: A common resource is an obstacle to the efficient allocation of resources unless it generates external benefits.

Statement 2: The idea of utilitarianism suggests that market allocation of resources does not maximize the value of an economy to all individuals. However, achieving the results that utilitarianism regards as optimal involves a loss of economic output.

With respect to these statements:

A)   only one is correct.

B)   both are correct.

C)   both are incorrect.

Correct answer is A)

Common resources and external benefits both represent obstacles to the efficient allocation of resources. Common resources tend to be overused and external benefits suggest that less than the efficient quantity is produced. Utilitarianism is the idea that fairness means all individuals own the same amount of resources. To bring about such an outcome would require transferring wealth from high income earners to low income earners. This would result in high income earners working less, so the economy would produce less wealth overall. The time and effort required to transfer the wealth would also divert resources from productive uses.

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