This quiz works best with JavaScript enabled. Home > Microeconomics > Failures > Market Failures – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Regulatory policies are rules established by ..... decree. A) Government. B) Social. C) Private. D) Market. Show Answer Correct Answer: A) Government. 2. A pure public good is always A) Provided by the government for all consumers. B) Provided free of charge because there is no opportunity cost. C) Available for consumption by others when consumed by an additional person. D) Heavily subsidised by the government. Show Answer Correct Answer: C) Available for consumption by others when consumed by an additional person. 3. A good is excludable if A) It is possible to prevent someone from enjoying its benefits. B) It is supplied by the government rather than through the free market. C) One person's use has no effect on the quantity available for someone else. D) It is supplied at zero price. Show Answer Correct Answer: A) It is possible to prevent someone from enjoying its benefits. 4. Tend to have positive externalities A) Merit goods. B) Demerit goods. C) Private goods. D) Economic goods. Show Answer Correct Answer: A) Merit goods. 5. Welfare gain refers to A) SB>SC. B) PB>PC. C) SB>PB. D) PC>PB. Show Answer Correct Answer: A) SB>SC. 6. How principals may respond to the principal-agent problem A) Better monitoring. B) Higher Wages. C) Delayed payments. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. The price you pay for a security system for your home A) Private costs. B) External costs. C) Private benefits. D) External benefits. Show Answer Correct Answer: A) Private costs. 8. What government agency is designed to oversee mergers between companies to ensure fair competition in a market? A) Department of Agriculture. B) DFAT. C) Treasury. D) ACCC. Show Answer Correct Answer: D) ACCC. 9. What is the key to how the market economy works A) Price mechanism. B) Demand. C) Supply. D) Demand and supply. Show Answer Correct Answer: A) Price mechanism. 10. Which of the following market structures is considered a price maker(the business sets the price and has control over the price)? A) Perfect competitiion. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: D) Monopoly. 11. An externality is a side effect of production or consumption that has consequences A) For consumers only. B) For people other than the producer or consumer. C) For producers and consumers. D) For producers only. Show Answer Correct Answer: B) For people other than the producer or consumer. 12. A measure of happiness or satisfaction A) Life Cycle. B) Welfare. C) Human Capital. D) Utility. Show Answer Correct Answer: D) Utility. 13. ..... are the benefits of a production and consumption enjoyed by a firm, individual or a government. A) External benefits. B) Private benefits. C) Social benefits. D) None of above. Show Answer Correct Answer: B) Private benefits. 14. This is the fact that consumption of a public good cannot be confined to those who have paid for it. A) Non-Rivalrous. B) External cost. C) Non-excludable. D) Freeriders. Show Answer Correct Answer: C) Non-excludable. 15. A market structure characterized by a single seller dominating all production of a given good A) Oligopoly. B) Monopoly. C) Perfect Competition. D) Monopolistic Competition. Show Answer Correct Answer: B) Monopoly. 16. What is the problem with public goods? A) Lacks rivalry. B) Lacks a excludability. C) Lacks consumer and producer surplus. D) None of the above. Show Answer Correct Answer: B) Lacks a excludability. 17. Tragedy of the ..... is the idea that common goods that everyone has access to are often misused and exploited. A) Commons. B) Exceptions. C) People. D) Oligarchs. Show Answer Correct Answer: A) Commons. 18. Excludable & Rival in consumption A) Public goods. B) Private Goods. C) Club Goods. D) Common Resources. Show Answer Correct Answer: B) Private Goods. 19. When a price of a good doubles the demand falls by more than half, and the revenue received by the seller falls. What does this suggest about the good? A) It has substitutes. B) It is a necessity. C) It is perfectly elastic in demand. D) It is in fixed supply. Show Answer Correct Answer: A) It has substitutes. 20. Which of the following industries is most likely to exist in a purely competitive market? A) Shoes. B) Wheat. C) Bottled water. D) Personal computers. Show Answer Correct Answer: B) Wheat. ← PreviousNext →Related QuizzesMicroeconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 3Market Failures Quiz 4Market Failures Quiz 5Market Failures Quiz 6Market Failures Quiz 7Market Failures Quiz 8Market Failures Quiz 9Market Failures Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books