# Thread: FREE CFA Level 1 sample questions everyday for December 2010 candidates

For efficient resource allocation, the Quantity of Product supplied = Quantity of Product consumed.
In many cases there may be Consumer Surplus or Producer surplus, but it will be efficient only when the sum of both is maximized. In that case it is assumed that efficient resource allocation is done.

2. Originally Posted by optimisticAL
For efficient resource allocation, the Quantity of Product supplied = Quantity of Product consumed.
In many cases there may be Consumer Surplus or Producer surplus, but it will be efficient only when the sum of both is maximized. In that case it is assumed that efficient resource allocation is done.
I agree with this explanation...seems right...will wait for the answer from the DG team

3. Q#3 Answer: (C) Resources are allocated efficiently when the sum of consumer and producer surplus is maximized.
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Today's Q (Questions and answers provided by Elan Guides)

Q#4: As the marginal benefit curve becomes more elastic, assuming that equilibrium price and quantity remain unchanged, consumer surplus:

A. Increases
B. Remains unchanged
C. Decreases
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4. Originally Posted by Shailesh Otari
Q#3 Answer: (C) Resources are allocated efficiently when the sum of consumer and producer surplus is maximized.
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Today's Q (Questions and answers provided by proavenues.com)

Q#4: As the marginal benefit curve becomes more elastic, assuming that equilibrium price and quantity remain unchanged, consumer surplus:

A. Increases
B. Remains unchanged
C. Decreases
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I think it's A.

5. Yaa...its A

6. I think its C ...
Since MB becomes more elastic .. then its curve will tend to be more horizontal... thus decreasing consumer surplus... Pls Correct me If i am wrong...

7. Originally Posted by deep_cfa
I think its C ...
Since MB becomes more elastic .. then its curve will tend to be more horizontal... thus decreasing consumer surplus... Pls Correct me If i am wrong...
I agree with Deep and it seems C is the right answer.

8. Q#4 Answer: (C) As the marginal benefit curve becomes more elastic (becomes flatter), the area of the triangle between the y-axis, the market price and the demand curve decreases (assuming equilibrium price and quantity remain unchanged).
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Today's Q (Questions and answers provided by Elan Guides)

Q#5: A subsidy most likely:

A. Shifts the demand curve to the right

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9. I think there will be underproduction. So it's B.

I am not receiving mails daily. What do I need to do to get email updates everyday?

10. Can u plz explain how d answer is 'A'..??

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