Smartindia Classroom
CONTENTS
Maths
English
Physics
Chemistry
Biology
History
Geography
Computer
Economics
Back to home
Start Practice
Question-1
Market failure occurs when
(A)
Society chooses the optimal mix of output
(B)
When market prices signal what to produce
(C)
When a society does not vote on what should be produced
(D)
The market mechanism does not produce the optimal outcome
Question-2
Externalities are defined as
(A)
The "spillover" effect from production or consumption of goods and services
(B)
Government regulations, which limit the number of people a firm can hire
(C)
Competitors actions, which cause a firm to have to respond
(D)
Lawn maintenance at the factory
Question-3
Externalities, both negative and positive, are a cause for
(A)
Concern
(B)
Market failure
(C)
Full employment
(D)
Monopolistic competition
Question-4
When you consume good Q, not only do you benefit from consuming the good, but other people benefit from your consumption as well. If firms produce good Q where P = MC, firms will be producing:
(A)
Less than the efficient level of output
(B)
The efficient level of output
(C)
More than the efficient level of output
(D)
So that consumer surplus is zero
Question-5
A person will continue to pursue an activity up to the point where:
(A)
Marginal benefit equals marginal private cost
(B)
Marginal social cost equals marginal external cost
(C)
Marginal benefit equals marginal social cost
(D)
Marginal benefit equals marginal damage cost
Question-6
If a large number of individuals are affected by an external benefit, private bargaining will not work because of:
(A)
The Coase theorem
(B)
The fallacy of composition
(C)
The free-rider problem
(D)
Non-rivalry
Question-7
The social demand minus the externalities represents:
(A)
The difference in price
(B)
The level of public goods
(C)
The optimal mix of output
(D)
The market demand
Question-8
An externality is an example of a market failure because:
(A)
A good can be consumed by many people without having to pay for it
(B)
The market is under-producing a good
(C)
The price of the product does not reflect all costs
(D)
The price does not fluctuate with supply and demand
Question-9
All of the following statements are correct except:
(A)
The total of consumer and producer surplus is higher under perfect competition than under monopoly
(B)
Under monopoly, the dead-weight loss is minimized
(C)
The consumer surplus under perfect competition is greater than under monopoly
(D)
The producer surplus is greater under monopoly than under perfect competition
Question-10
If some gain and some lose as the result of a proposed change and it can be demonstrated that the value of the gains would exceed the value of the losses, then the change is said to be:
(A)
Unequivocally Pareto optimal
(B)
Potentially efficient
(C)
Inefficient
(D)
Technically efficient
Your Score 0/10
Click
here
to see your answersheet and detailed track records.
Cambridge Secondary Grade 9
IGCSE
Practice in Related Chapters
Competitive Markets Demand and Supply
The Foundations of Economics
Elasticities
Fundamental Concepts in Economics
The Theory of the Firms Production, Costs, Revenue and Profits
The Theory of the Firm II Market Structures
The Level of Over All Econonic Activity
Aggregate Demand and Aggregate Supply
Macroeconomic Objectives I : Low Unemployment,Low and Stable Rate of Inflation
Demand-Side and Supply-Side Policies
Government Intervention
Macro Economic Objectives II : Economic Growth and Equity in the Distribution of Income
Market Failure
International Trade
Exchange Rates and the Balance of Payments
Powered By
