This quiz works best with JavaScript enabled. Home > Microeconomics > Failures > Market Failures – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Example of Common Resources A) National defense. B) Light from the lighthouse. C) Basic Research. D) Cable. Show Answer Correct Answer: D) Cable. 2. 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. 3. 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. 4. A key characteristic of this market structure is that there is interdependence among firms. A) Perfect (pure) competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: C) Oligopoly. 5. Which of the following is not an impact of a subsidy A) Increased jobs. B) Lower prices. C) Increased production. D) Government revenue. Show Answer Correct Answer: D) Government revenue. 6. "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) Excise Taxes. B) Ad Valorem Taxes. C) Indirect Taxes. D) Subsidies. Show Answer Correct Answer: D) Subsidies. 7. 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. 8. When companies that form on oligopoly cooperate together to set or fix prices at a given level, they are engaging in A) Cartel. B) Non-Price Competition. C) Collusion. D) Price Leadership. Show Answer Correct Answer: D) Price Leadership. 9. Choice is a necessary part of the economic problem because: A) Wants are finite. B) Economic decisions involve an opportunity cost. C) Resources are infinite. D) Consumption creates externalities. Show Answer Correct Answer: B) Economic decisions involve an opportunity cost. 10. Government programs that supplement the incomes of the needy A) Social Insurance. B) Welfare. C) Discrimination. D) Union. Show Answer Correct Answer: B) Welfare. 11. 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 copyright. B) A license. C) A patent. D) A public franchise. Show Answer Correct Answer: D) A public franchise. 12. Producers have the most market power where? A) In a oligopoly. B) In a monopoly. C) In a perfect competition market. D) In monopolistic competition. Show Answer Correct Answer: B) In a monopoly. 13. The annoyance of your neighbor because she doesn't like your achingly conventional music A) Private costs. B) External costs. C) Private benefits. D) External benefits. Show Answer Correct Answer: B) External costs. 14. Which of the following defines a Quasi-Public Good? A) Semi Non Rival & Semi Non Excludable. B) Non Rival & Non Excludable. C) Non Excludable & Semi Non Rival. D) Semi Non Excludable & Non Rival. Show Answer Correct Answer: A) Semi Non Rival & Semi Non Excludable. 15. A merit good, such as healthcare, is A) Non-rival with positive externalities in consumption. B) Rival with positive externalities in production only. C) Non-excludable with positive externalities in production. D) Excludable with positive externalities in consumption. Show Answer Correct Answer: D) Excludable with positive externalities in consumption. 16. The Government seeks to encourage ..... Externalities. A) Negative. B) Neutral. C) Positive. D) None of above. Show Answer Correct Answer: C) Positive. 17. Not excludable & Not rival in consumption A) Club Goods. B) Common Resources. C) Private Goods. D) Public Goods. Show Answer Correct Answer: D) Public Goods. 18. What is Negative Externality? A) Altering incentives so that people take account of the external effects of their actions. B) External benefits. C) External costs. D) None of above. Show Answer Correct Answer: C) External costs. 19. The PUBLIC SECTOR (government) makes all economic decisions. A) Command. B) Mixed. C) Market. D) None of above. Show Answer Correct Answer: A) Command. 20. The price you pay for an iTunes download A) Private costs. B) External costs. C) Private benefits. D) External benefits. Show Answer Correct Answer: A) Private costs. ← PreviousNext →Related QuizzesMicroeconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 3Market Failures Quiz 4Market Failures Quiz 6Market Failures Quiz 7Market Failures Quiz 8Market Failures Quiz 9Market Failures Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books