This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Failures > Market Failures – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Due to good weather, there is a surplus in the market for an agricultural product. Which change would cause the market to return to equilibrium? A) A decrease in demand. B) A fall in price. C) An increase in supply. D) A rise in price. Show Answer Correct Answer: A) A decrease in demand. 2. Costs to society of producing one more unit of a good A) Externality. B) Marginal Social Costs. C) Marginal Private Costs. D) Market Failure. Show Answer Correct Answer: B) Marginal Social Costs. 3. There will be a case study on law in which you will be tasked with providing a couple written responses. The excerpts will provide you all the information needed. Good? A) No. B) Yes. C) Any other questions?. D) Ummmm. Show Answer Correct Answer: B) Yes. 4. Which of the following is a modern cartel? A) Coca-Cola, Pepsi, and Dr Pepper Snapple Group. B) Microsoft. C) Organization of Petroleum Exporting Countries. D) Standard Oil Company. Show Answer Correct Answer: C) Organization of Petroleum Exporting Countries. 5. What is the formula for social benefits? A) Social benefits = private costs + external benefits. B) Social benefits = private benefits + external costs. C) Social benefits = private benefits + external benefits. D) Social costs = private costs + external costs. Show Answer Correct Answer: C) Social benefits = private benefits + external benefits. 6. Which of the following is NOT a reason for market failure? A) Incomplete markets. B) Presence of Public Goods. C) Perfectly competitive markets. D) Presence of Positive Externalities. Show Answer Correct Answer: C) Perfectly competitive markets. 7. What is an External Cost? A) The uncompensated impact of one person's actions on the well-being of a bystander. B) An uncompensated cost that an individual or firm imposes on others. C) A benefit that an individual or firm confers on others without receiving compensation. D) None of above. Show Answer Correct Answer: B) An uncompensated cost that an individual or firm imposes on others. 8. An economy operates entirely as a market system.Which type of service would not be provided in such an economy? A) B free government health services. B) C private educational services. C) A commercial banking services. D) D profitable retail services. Show Answer Correct Answer: A) B free government health services. 9. So in other words, market systems do not work in which? A) Fields in which the community pays a tax for the service. B) Fields in which a single business pays. C) Fields in which a company buys a truck to haul things. D) Fields in which a person goes to the store to make a purchase. Show Answer Correct Answer: A) Fields in which the community pays a tax for the service. 10. An illegal agreement among firms to divide the market, set prices, or limit production A) Price domination. B) Barrier to entry. C) License to sell. D) Collusion. Show Answer Correct Answer: D) Collusion. 11. Government subsidies have the effect of A) Reducing supply. B) Lowering output. C) Lowering the cost of production. D) Raising production costs. Show Answer Correct Answer: C) Lowering the cost of production. 12. Journeys in city centres may be made by bus or by car. What is an external cost of this? A) Bus fares. B) License fees for cars. C) Purchase of buses. D) Car fumes and noise. Show Answer Correct Answer: D) Car fumes and noise. 13. SBB is an example of a company in the ..... A) Public sector. B) Private sector. C) Third sector. D) None of above. Show Answer Correct Answer: A) Public sector. 14. Which market structure do we encounter most often in our daily lives? A) Oligopoly. B) Perfect competition. C) Monopoly. D) Monopolistic competition. Show Answer Correct Answer: D) Monopolistic competition. 15. When the government creates a law used to protect individuals this is know as: A) Deregulation. B) Positive Externality. C) Preventing a market failure. D) Regulation. Show Answer Correct Answer: D) Regulation. 16. Which of the following market structures would be considered the least competitive? A) Monopoly. B) Perfect competition. C) Monopolistic competition. D) Oligopoly. Show Answer Correct Answer: A) Monopoly. 17. A negative externality results due to firms A) Being very, very, bad. B) Firms not realizing they are polluting. C) Firms internalizing production costs. D) Not paying the full cost of production. Show Answer Correct Answer: D) Not paying the full cost of production. 18. Ability of Apple to influence their prices A) A lack of competition. B) A monopoly. C) Competition. D) Market Powrer. Show Answer Correct Answer: D) Market Powrer. 19. This person is someone who doesn't pay for the use of certain goods or services. A) Equal rider. B) Free rider. C) Easy rider. D) Dead beat. Show Answer Correct Answer: B) Free rider. 20. Demerit goods represent a type of market failure because A) They are over-consumed in a free market. B) Their consumption results in positive externalities. C) They are under-consumed when left to free market forces. D) Their production results in negative production externalities. Show Answer Correct Answer: A) They are over-consumed in a free market. 21. Markets like automobiles, mobile phones, and cable TV are examples of which market structure? A) Oligopoly. B) Monopolistic competition. C) Monopoly. D) Perfect competition. Show Answer Correct Answer: A) Oligopoly. 22. The existence of market power leads to ..... efficiency and ..... of economic welfare. A) Increased; loss. B) Reduced; loss. C) Increased; gain. D) Reduced; gain. Show Answer Correct Answer: B) Reduced; loss. 23. A person benefiting from the protection of the armed forces does not affect the ability of another person to benefit. What quality of the armed forces (as a service) is this a result of? A) Rivalry. B) Non-excludability. C) Non-rivalry. D) Excludability. Show Answer Correct Answer: C) Non-rivalry. 24. The accumulation of investments in people, such as education and on-the-job training. A) Negative Income Tax. B) Human Capital. C) Social insurance. D) Union. Show Answer Correct Answer: B) Human Capital. 25. This means that consumption by one person does not reduce the consumption by another persons. A) Non-excludable. B) Non-Rivalrous. C) External cost. D) Freeriders. Show Answer Correct Answer: B) Non-Rivalrous. 26. When is competition likely to be limited? A) No transportation cost. B) Perfect information to all the participants. C) Presence of large number of firms. D) Presence of patents. Show Answer Correct Answer: D) Presence of patents. 27. Which market structure would be considered the most competitive because it has the most number of sellers? A) Monopoly. B) Monopolistic competition. C) Oligopoly. D) Perfect (pure) competition. Show Answer Correct Answer: D) Perfect (pure) competition. 28. Which of the following best represents a positive externality? A) Enjoying watching birds at a neighbor's bird feeder. B) Being disturbed by neighboring construction noise. C) Purchasing a pass for an amusement park. D) Dumping waste on someone else' s property. Show Answer Correct Answer: A) Enjoying watching birds at a neighbor's bird feeder. 29. The benefit to private businesses or individuals is shown in the curve.. A) MSB. B) MPB. C) MPC. D) MSC. Show Answer Correct Answer: B) MPB. 30. Products that the government feels that people will under-consume and suppliers over supply: A) Public goods. B) Merit goods. C) Economic goods. D) Demerit goods. Show Answer Correct Answer: B) Merit goods. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 3Market Failures Quiz 4Market Failures Quiz 5Market Failures Quiz 7Market Failures Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books