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Question-1
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-2
According to Ronald Coase:
(A)
Governments should tax monopolistic supplier of durable goods
(B)
There is an ‘n’ shaped relationship between income inequality and GDP per capita
(C)
Additional greenhouse gases from developing economies can be balanced by a reduction in pollution from highly developed economies
(D)
A monopoly supplier of a durable good would sell all units of output at the perfectly competitive price
Question-3
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-4
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.
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
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-7
All of the following statements are incorrect except:
(A)
When marginal social benefits are lower than marginal private benefits, output is at its optimal level
(B)
Loud music is an example of negative benefit externality
(C)
Marginal social benefits can never be larger than private social benefits
(D)
When marginal social benefits are greater than marginal private benefits, there is a negative externality
Question-8
The total cost to society of producing an additional unit of a good or service is the:
(A)
Marginal damage cost
(B)
Marginal social cost
(C)
Marginal external cost
(D)
Marginal private cost.
Question-9
All of the following statements are correct about the Kuznets curve except:
(A)
China and India have reached the peak of the curve
(B)
The United States are not at the peak of the curve yet
(C)
It suggests that additional greenhouse gases from developing economies can be balanced by a reduction in pollution from highly developed economies
(D)
It describes an ‘n’ shaped relationship between income inequality and GDP per capita
Question-10
Externalities, both negative and positive, are a cause for..
(A)
Concern
(B)
Market Failure
(C)
Full Employment
(D)
Monopolistic Competition
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Cambridge Secondary Grade 10
IGCSE
Practice in Related Chapters
Demand-Side and Supply-Side Policies
Elasticities
Competitive Markets Demand and Supply
The Foundation of Economics
The Theory of the Firms Production, Costs, Revenue and Profits
The Theory of the Firm II Market Structures
The Level of Over All Economic Activity
Aggregate Demand and Aggregate Supply
Government Intervention
Macroeconomic Objectives I : Low Unemployment,Low and Stable Rate of Inflation
Macro Economic Objectives II : Economic Growth and Equity in the Distribution of Income
Market Failure
International Trade
Exchange Rates and the Balance of Payments
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