This quiz works best with JavaScript enabled. Home > Economics > Market Dynamics > Market 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. If as the price of a product increases, TR increases then the product is A) Inelastic. B) Elastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: A) Inelastic. 2. How did the government respond to the "smoggy 70s" ? A) They funded less oil exploration. B) They set standards for car emissions. C) They began to invest in electric cars. D) They set a price ceiling for large cars. Show Answer Correct Answer: B) They set standards for car emissions. 3. Market based policies are policies that do not manipulate the market in any way. A) False. B) True. Show Answer Correct Answer: A) False. 4. If a student volunteers at a food pantry on Fridays after school, which of the following might be a negative externality? A) The student might learn a new skill. B) The student might make some new friends. C) The student's parents have to drive him or her to the food pantry. D) The student might decide to volunteer two days a week. Show Answer Correct Answer: C) The student's parents have to drive him or her to the food pantry. 5. A ..... is a maximum price sellers are allowed to charge for a good. It's an upper limit for the price. A) Equilibrium. B) Shortage. C) Surplus. D) Price ceiling. Show Answer Correct Answer: D) Price ceiling. 6. How did AT&T cause a market failure? A) They established an externality. B) They were investing in more competition. C) They had become a monopoly. D) They expanded to other countries. Show Answer Correct Answer: C) They had become a monopoly. 7. The idea that "externalities arise because something of value has no price attached to it" is associated with A) Public goods, but not with common resources. B) Common resources, but not with public goods. C) Both public goods and common resources. D) Neither public goods nor common resources. Show Answer Correct Answer: C) Both public goods and common resources. 8. Private businesses cannot always provide goods and services A) Profitably. B) Fairly. C) Safely. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. What happens to demand when the government puts a cap on rental prices? A) It remains the same. B) It goes up significantly. C) It goes down significantly. D) None of above. Show Answer Correct Answer: B) It goes up significantly. 10. Only five firms produce this product in the Unites States. A) Perfect Competition. B) Monopoly. C) Monopolistic Competition. D) Oligopoly. Show Answer Correct Answer: D) Oligopoly. 11. If the problem concerns production, the diagram will have two curves: A) Marginal (private and social) cost(as the supply curve). B) Marginal (private and social) benefit (as the demand curve). Show Answer Correct Answer: A) Marginal (private and social) cost(as the supply curve). 12. Private benefits plus external benefits is A) External benefit. B) Individual's benefits. C) Social benefits. D) None of above. Show Answer Correct Answer: C) Social benefits. 13. Which of the following is not a function of taxation? A) To redistribute income and wealth. B) To reduce the consumption of certain goods and services. C) To raise government revenue. D) To encourage the output of products deemed beneficial to society. Show Answer Correct Answer: D) To encourage the output of products deemed beneficial to society. 14. If the production of a product or service involves external benefits, then the government can improve efficiency in the market by A) Providing a subsidy to correct for an overallocation of resources. B) Providing a subsidy to correct for an underallocation of resources. C) Imposing a corrective tax to correct for an overallocation of resources. D) Imposing a corrective tax to correct for an underallocation of resources. Show Answer Correct Answer: B) Providing a subsidy to correct for an underallocation of resources. 15. ..... are situations when there's an external costs or external benefits that accrue to other people or society as a whole. A) Externalities. B) Internalities. C) Progressives. D) None of above. Show Answer Correct Answer: A) Externalities. 16. Any factor that makes it difficult for a new firm to enter a market A) Barrier to Entry. B) Monopoly. C) Start-Up Costs. D) Oligopoly. Show Answer Correct Answer: A) Barrier to Entry. 17. If the QD of a product changes MORE than the price change, then the product is A) Elastic. B) Inelastic. C) Unit elastic. D) Perfectly inelastic. Show Answer Correct Answer: A) Elastic. 18. What market structure would agricultural products fall into? A) Perfect (pure) competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: A) Perfect (pure) competition. 19. Marginal Social Benefit curve is A) Upward sloping. B) Downward sloping. Show Answer Correct Answer: B) Downward sloping. 20. An example of a public good is ..... A) Firefighters. B) Police officers. C) Parks. D) All answers are correct. Show Answer Correct Answer: D) All answers are correct. ← PreviousNext →Related QuizzesMarket Dynamics QuizzesEconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 3Market Failures Quiz 4Market Failures Quiz 5Market Failures Quiz 6Market Failures Quiz 7Market Failures Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books