This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Failures > Market Failures – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The benefit your neighbor receives from hearing you play your pleasant music A) Private benefits. B) External costs. C) External benefits. D) Private costs. Show Answer Correct Answer: C) External benefits. 2. Which of the following is a characteristic of perfect competition? A) Price maker. B) Barrier to entry. C) One seller in the whole industry. D) Produce homogenous product. Show Answer Correct Answer: D) Produce homogenous product. 3. Which of the following can practice collusion?: A) A monopolistically-competitive firm. B) A perfectly-competitive firm. C) A monopoly. D) An oligopoly. Show Answer Correct Answer: D) An oligopoly. 4. Suppose there are a bunch of baby sitters in a neigborhood who all have different abilities, what is the market structure for babysitting in that neighborhood? A) Perfect competition. B) Oligopoly. C) Mnopolistic competition. D) Monopoly. Show Answer Correct Answer: C) Mnopolistic competition. 5. A market structure where a single producer supplies a unique product that has no substitutes A) Monopoly. B) Nonprice competition. C) Oligopoly. D) Natural monopoly. Show Answer Correct Answer: A) Monopoly. 6. A monopoly can best be summed up as A) Few producers, similar products. B) Many producers, similar but varied products. C) Many producers, identical products. D) One producer, a unique product. Show Answer Correct Answer: D) One producer, a unique product. 7. Which two market structures use non-price competition (use of advertising) the most? A) Monopoly and perfect competition. B) Monopolistic competition and oligopoly. C) Pure competition and monopoly. D) Pure monopoly and geographic monopoly. Show Answer Correct Answer: B) Monopolistic competition and oligopoly. 8. Getting a flu shot is an example of a ..... externality A) Negative. B) Neutral. C) Positive. D) None of above. Show Answer Correct Answer: C) Positive. 9. Why do polluted factories over produce products? A) Costs are not charged to the producer. B) Benefits of the producing facotry are wanted by the community. C) Stores stock more than they can sell. D) People might refuse to purchase the product. Show Answer Correct Answer: A) Costs are not charged to the producer. 10. Products that are offered are identical in A) Monopolistic competition. B) Oligarchy. C) Perfect competition. D) Monopoly. Show Answer Correct Answer: C) Perfect competition. 11. Market failure in which there is unintended harm or inconvenience to a third party. A) Economies of scale. B) Public goods. C) Positive externality. D) Negative externality. Show Answer Correct Answer: D) Negative externality. 12. Which of the following is least likely to be classed a merit good? A) Education. B) Heath care. C) Training and development. D) Fossil fuels. Show Answer Correct Answer: D) Fossil fuels. 13. A market structure in which a few firms or businesses dominate the market but produce similar goods A) A market share. B) Monopoly. C) The free-rider problem. D) Oligopoly. Show Answer Correct Answer: D) Oligopoly. 14. A difference in two or more parties' access to relevant knowledge A) Externalities. B) Public Goods. C) Information asymmetry. D) None of above. Show Answer Correct Answer: C) Information asymmetry. 15. Benefits to consumers from consuming one more unit of a good A) Marginal Private Benefits. B) Marginal Social Benefits. C) Negative Externality of Production. D) Tradable Permits/Cap and Trade Schemes. Show Answer Correct Answer: A) Marginal Private Benefits. 16. Market structure in which a few very large sellers dominate the industry. A) Monopolistic competition. B) Oligopoly. C) Monopoly. D) Perfect competition. Show Answer Correct Answer: B) Oligopoly. 17. Examples of market failure occur because A) Business and consumers value personal benefits over social costs. B) Businesses value personal benefits over social costs. C) Consumers value social benefits over personal costs. D) None of the above. Show Answer Correct Answer: A) Business and consumers value personal benefits over social costs. 18. Example of Common Resources A) Light from the lighthouse. B) National defense. C) Basic Research. D) Cable. Show Answer Correct Answer: D) Cable. 19. Oligopolies may sometimes act like monopolies when they use cooperative pricing. Which form of cooperative pricing is legal in the United States? A) Cartel formation. B) Collusion. C) Price leadership. D) All of the above. Show Answer Correct Answer: C) Price leadership. 20. What can be done to solve problems related to the tragedy of the commons? A) Privatization. B) Regulations, restrictions and quotas. C) Public education. D) All of the above. Show Answer Correct Answer: D) All of the above. 21. A key characteristic of this market structure is that there is interdependence among firms. A) Perfect (pure) competition. B) Monopolistic competition. C) Monopoly. D) Oligopoly. Show Answer Correct Answer: D) Oligopoly. 22. Which of the following is not an impact of a subsidy A) Increased jobs. B) Increased production. C) Lower prices. D) Government revenue. Show Answer Correct Answer: D) Government revenue. 23. "Assistance by the government to individuals or groups or individuals, such as firms, consumers, industries or sectors of an economy" Is the definition for A) Indirect Taxes. B) Subsidies. C) Excise Taxes. D) Ad Valorem Taxes. Show Answer Correct Answer: B) Subsidies. 24. Market failure results in a misallocation of resources. In some cases, this can be corrected by the government A) Restricting the manufacture of goods that generate positive externalities. B) Providing public goods. C) Subsidising all loss-making firms. D) Placing a tax on merit goods. Show Answer Correct Answer: B) Providing public goods. 25. When companies that form on oligopoly cooperate together to set or fix prices at a given level, they are engaging in A) Cartel. B) Collusion. C) Non-Price Competition. D) Price Leadership. Show Answer Correct Answer: D) Price Leadership. 26. Choice is a necessary part of the economic problem because: A) Resources are infinite. B) Consumption creates externalities. C) Economic decisions involve an opportunity cost. D) Wants are finite. Show Answer Correct Answer: C) Economic decisions involve an opportunity cost. 27. Government programs that supplement the incomes of the needy A) Welfare. B) Social Insurance. C) Union. D) Discrimination. Show Answer Correct Answer: A) Welfare. 28. What is a contract issued by a government entity that gives a firm a sole right to provide a good or service in a certain area? A) A public franchise. B) A copyright. C) A patent. D) A license. Show Answer Correct Answer: A) A public franchise. 29. Producers have the most market power where? A) In a perfect competition market. B) In a oligopoly. C) In monopolistic competition. D) In a monopoly. Show Answer Correct Answer: D) In a monopoly. 30. The annoyance of your neighbor because she doesn't like your achingly conventional music A) External costs. B) Private costs. C) External benefits. D) Private benefits. Show Answer Correct Answer: A) External costs. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 4Market Failures Quiz 5Market Failures Quiz 6Market Failures Quiz 7Market Failures Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books