This quiz works best with JavaScript enabled. Home > Microeconomics > Failures > Market Failures – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is an example of a private good? A) Public park. B) Park bench. C) Post office. D) Apples. Show Answer Correct Answer: D) Apples. 2. Asymmetric information means A) Producers and consumers have equal information. B) Producers and consumers do not have the same information about a good/service. C) Incorrect information. D) Advanced information. Show Answer Correct Answer: B) Producers and consumers do not have the same information about a good/service. 3. Which is not an example of a publicly owned industry intended to provide goods and services more efficiently to the public? A) Postal service. B) Public transportation. C) Airline industry. D) Utilities such as gas, water, electric. Show Answer Correct Answer: C) Airline industry. 4. Supply and Demand is closely related to which? A) Government Regulation. B) Monopoly. C) Perfect competition. D) Cultural Fairness. Show Answer Correct Answer: C) Perfect competition. 5. What is an example of a negative consumption externality? A) Increased standards of education in schools. B) Increased research and development into cancer prevention. C) Health impacts for society of passive tobacco smoking. D) Environmental Pollution. Show Answer Correct Answer: C) Health impacts for society of passive tobacco smoking. 6. How are social costs calculated? A) Fixed costs plus variable costs. B) Private benefits less private costs. C) Private costs plus external costs. D) Social benefits less external costs. Show Answer Correct Answer: C) Private costs plus external costs. 7. What makes the supply of a product more elastic? A) It is a necessity and with no substitutes. B) It cannot be stored easily and costlier to store. C) It can be produced easily in less time. D) Altering cost of the product is high. Show Answer Correct Answer: C) It can be produced easily in less time. 8. The following exists so that it can protect the public from natural market forces that may lead to a lack of competition A) Excise taxes. B) Anti-competitive laws. C) Subsidies. D) Safety nets. Show Answer Correct Answer: B) Anti-competitive laws. 9. In Public goods, what is meant by the property of non-rivalry? A) Marginal cost of an additional user is high. B) Marginal cost of an additional user is zero. C) Marginal cost is high. D) Marginal cost is zero. Show Answer Correct Answer: B) Marginal cost of an additional user is zero. 10. The role of government in a market system A) Does not exist. B) Is restricted to establishing property rights. C) Includes improving situations that would otherwise result in a market failure. D) Includes improving on situations that would otherwise result in a government failure?. Show Answer Correct Answer: C) Includes improving situations that would otherwise result in a market failure. 11. A free good has: A) An opportunity cost. B) No opportunity cost. C) Excludability. D) Has a price. Show Answer Correct Answer: B) No opportunity cost. 12. More harmful than customers realize: A) Merit goods. B) Demerit goods. C) Private goods. D) Economic goods. Show Answer Correct Answer: B) Demerit goods. 13. What is the underlying mechanism which explains why a good does not become a private one? A) Tragedy of the Commons. B) Negative Externalities. C) Positive Externalities. D) Free Rider Problem. Show Answer Correct Answer: D) Free Rider Problem. 14. Once the government has funded the armed forces nobody within its territory can be prevented from benefiting from the protection provided. What quality of the armed forces (as a service) is this a result of? A) Excludability. B) Non-excludability. C) Rivalry. D) Non-rivalry. Show Answer Correct Answer: B) Non-excludability. 15. Products that society deems as bad for you and is thought to be overprovided by the market A) Merit goods. B) Demerit goods. C) Public goods. D) Common Pool Resources. Show Answer Correct Answer: B) Demerit goods. 16. If firms are competitive and profit-maximizing, the demand curve for labor is determined by A) The opportunity cost of workers' time. B) The value of the marginal product of labor. C) Offsetting income and substitution effects. D) The value of the marginal product of capital. Show Answer Correct Answer: B) The value of the marginal product of labor. 17. In this market structure, products are similar but have some differences. A) Monopoly. B) Monopolistic Competition. C) Perfect Competition. D) Oligopoly. Show Answer Correct Answer: B) Monopolistic Competition. 18. This market structure can act like a monopoly when the firms all set prices the same A) Monopoly. B) Monopolistic Competition. C) Perfect Competitio. D) Oligopoly. Show Answer Correct Answer: D) Oligopoly. 19. Excludable & not rival in consumption A) Club Goods. B) Common Resources. C) Public Goods. D) Private Goods. Show Answer Correct Answer: A) Club Goods. 20. A firm produces a good with a price elasticity of demand greater than 1. What must the firm experience if there is a fall in the price of this good? A) A decrease in costs. B) A decrease in sales. C) An increase in revenue. D) An increase in profits. Show Answer Correct Answer: C) An increase in revenue. ← PreviousNext →Related QuizzesMicroeconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 3Market Failures Quiz 4Market Failures Quiz 5Market Failures Quiz 6Market Failures Quiz 8Market Failures Quiz 9Market Failures Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books