This quiz works best with JavaScript enabled. Home > Microeconomics > Failures > Market Failures – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 10 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which market structure would be considered the most competitive because it has the most number of sellers? A) Perfect (pure) competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: A) Perfect (pure) competition. 2. Which of the following best represents a positive externality? A) Purchasing a pass for an amusement park. B) Being disturbed by neighboring construction noise. C) Dumping waste on someone else' s property. D) Enjoying watching birds at a neighbor's bird feeder. Show Answer Correct Answer: D) Enjoying watching birds at a neighbor's bird feeder. 3. The benefit to private businesses or individuals is shown in the curve.. A) MPB. B) MSC. C) MSB. D) MPC. Show Answer Correct Answer: A) MPB. 4. Products that the government feels that people will under-consume and suppliers over supply: A) Merit goods. B) Demerit goods. C) Public goods. D) Economic goods. Show Answer Correct Answer: A) Merit goods. 5. A market is defined as being in equilibrium when A) There is maximum output at minimum cost. B) Prices are at their lowest possible level. C) There is no tendency for the market price to change. D) Consumer satisfaction is maximised. Show Answer Correct Answer: C) There is no tendency for the market price to change. 6. A firm in a perfectly competitive labor market will stop employing labor when ..... A) MR= MC. B) Value of the marginal product of labor = marginal revenue. C) Value of the marginal product of labor = wage rate. D) Total cost = total revenue. Show Answer Correct Answer: C) Value of the marginal product of labor = wage rate. 7. Which market structure has a large number of buyers and sellers (the most) and products are identical? A) Perfect (pure) competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: A) Perfect (pure) competition. 8. If it becomes easier for a market to see a new business enter it, that market will eventually A) See increased transaction costs. B) See a lowering of overall consumers. C) See more governmental regulation. D) See more competition. Show Answer Correct Answer: D) See more competition. 9. Which of the following is an example of companies in monopolistic competition? A) Nike, Regal Cinemas, Toyota. B) Netflix, Hulu, Amazon Prime. C) Coca-Cola, Adidas, General Electric. D) AT&T, Universal Studios, Kellogg's. Show Answer Correct Answer: B) Netflix, Hulu, Amazon Prime. 10. The following is a headline from the newspaper. Car drivers to pay higher taxesWhat will result from an increased tax on cars? A) Reduced number of bus journeys. B) Increased petrol (gas) sales. C) Increased employment in the car industry. D) Reduced external costs of car use. Show Answer Correct Answer: D) Reduced external costs of car use. 11. The following statements are true of government regulations except A) They limit economic freedom. B) They seek to limit negative externalities. C) They exist to protect consumers. D) They are always popular with private businesses. Show Answer Correct Answer: D) They are always popular with private businesses. 12. Which type of laws promote competition by preventing or breaking up monopolies? A) Labor laws. B) Antitrust laws. C) Laws protecting the environment. D) Constitutional law. Show Answer Correct Answer: B) Antitrust laws. 13. An inferior good always has: A) Positive price elasticity of demand. B) Many substitutes. C) Negative cross elasticity of demand. D) Negative income elasticity of demand. Show Answer Correct Answer: D) Negative income elasticity of demand. 14. Which action by the operators of an airport directly reduces external costs? A) The abolition of night flights. B) The building of a new runway. C) The payment of a productivity bonus. D) The reduction of charges for landing aircraft. Show Answer Correct Answer: A) The abolition of night flights. 15. What is an External Benefit? 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: C) A benefit that an individual or firm confers on others without receiving compensation. 16. In a city, what is most unlikely to be provided by the private market system? A) A museum. B) A school. C) A sports field. D) Street lights. Show Answer Correct Answer: D) Street lights. 17. Utility companies such as electricity would be an example of which type of monopoly? A) Natural monopoly. B) Geographic monopoly. C) Pure monopoly. D) Technological monopoly. Show Answer Correct Answer: A) Natural monopoly. 18. Which of the categories below can junk food be classified as? A) Merit Good. B) Demerit good. C) Private good. D) Public good. Show Answer Correct Answer: B) Demerit good. 19. A situation where the market does not allocate resources very efficiently is called what? A) Market Failure. B) Market Adjustment. C) Market Allocation. D) Market Eccificient. Show Answer Correct Answer: A) Market Failure. 20. Which of the following is not an impact of taxation? A) Government revenue. B) Higher prices. C) Falling quantity demanded. D) Lower prices. Show Answer Correct Answer: D) Lower prices. ← PreviousNext →Related QuizzesMicroeconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 3Market Failures Quiz 4Market Failures Quiz 5Market Failures Quiz 6Market Failures Quiz 7Market Failures Quiz 8Market Failures Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books