This quiz works best with JavaScript enabled. Home > Microeconomics > Failures > Market Failures – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 9 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. An economy operates entirely as a market system.Which type of service would not be provided in such an economy? A) A commercial banking services. B) B free government health services. C) C private educational services. D) D profitable retail services. Show Answer Correct Answer: B) B free government health services. 3. 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 person goes to the store to make a purchase. D) Fields in which a company buys a truck to haul things. Show Answer Correct Answer: A) Fields in which the community pays a tax for the service. 4. An illegal agreement among firms to divide the market, set prices, or limit production A) Barrier to entry. B) Collusion. C) Price domination. D) License to sell. Show Answer Correct Answer: B) Collusion. 5. Government subsidies have the effect of A) Lowering the cost of production. B) Reducing supply. C) Lowering output. D) Raising production costs. Show Answer Correct Answer: A) Lowering the cost of production. 6. 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. 7. 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. 8. Which market structure do we encounter most often in our daily lives? A) Monopolistic competition. B) Oligopoly. C) Perfect competition. D) Monopoly. Show Answer Correct Answer: A) Monopolistic competition. 9. When the government creates a law used to protect individuals this is know as: A) Deregulation. B) Regulation. C) Positive Externality. D) Preventing a market failure. Show Answer Correct Answer: B) Regulation. 10. Which of the following market structures would be considered the least competitive? A) Perfect competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: D) Monopoly. 11. A negative externality results due to firms A) Being very, very, bad. B) Not paying the full cost of production. C) Firms internalizing production costs. D) Firms not realizing they are polluting. Show Answer Correct Answer: B) Not paying the full cost of production. 12. Ability of Apple to influence their prices A) Market Powrer. B) Competition. C) A lack of competition. D) A monopoly. Show Answer Correct Answer: A) Market Powrer. 13. 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. 14. Demerit goods represent a type of market failure because A) Their consumption results in positive externalities. B) Their production results in negative production externalities. C) They are over-consumed in a free market. D) They are under-consumed when left to free market forces. Show Answer Correct Answer: C) They are over-consumed in a free market. 15. Markets like automobiles, mobile phones, and cable TV are examples of which market structure? A) Perfect competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: C) Oligopoly. 16. The existence of market power leads to ..... efficiency and ..... of economic welfare. A) Reduced; gain. B) Increased; loss. C) Reduced; loss. D) Increased; gain. Show Answer Correct Answer: C) Reduced; loss. 17. 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) Excludability. B) Non-excludability. C) Rivalry. D) Non-rivalry. Show Answer Correct Answer: D) Non-rivalry. 18. The accumulation of investments in people, such as education and on-the-job training. A) Human Capital. B) Union. C) Negative Income Tax. D) Social insurance. Show Answer Correct Answer: A) Human Capital. 19. This means that consumption by one person does not reduce the consumption by another persons. A) Non-Rivalrous. B) External cost. C) Non-excludable. D) Freeriders. Show Answer Correct Answer: A) Non-Rivalrous. 20. 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. ← 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 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books