This quiz works best with JavaScript enabled. Home > Economics > Market Dynamics > Market Failures > Market Failures – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is an example of a positive externality? A) Air pollution. B) A person littering in a public park. C) A nice garden in front of your neighbor's house. D) The pollution of a stream. Show Answer Correct Answer: C) A nice garden in front of your neighbor's house. 2. Regulatory policies are rules established by ..... decree. A) Government. B) Social. C) Private. D) Market. Show Answer Correct Answer: A) Government. 3. Safety nets, in the context of market failure, are A) Goods that are not safe, equitable, and profitable in the market. B) Programs that help people who are struggling. C) Designed to minimize external costs and shift the costs back to the producers. D) Payments given by the government to private companies as an incentive for them to produce a certain good. Show Answer Correct Answer: B) Programs that help people who are struggling. 4. Oligopoly A) Market structure in which only a few large sellers dominate and have the ability to affect prices in an industry. B) Market structure having all conditions of pure competition except for identical products. C) Market structure in which a firm has a monopoly because of its location or the small size of the market. D) Monopoly created and or owned by the government. Show Answer Correct Answer: A) Market structure in which only a few large sellers dominate and have the ability to affect prices in an industry. 5. Which categories of goods are excludable? A) Private goods and club goods. B) Private goods and common resources. C) Public goods and club goods. D) Public goods and common resources. Show Answer Correct Answer: A) Private goods and club goods. 6. Marginal Social Cost curve is A) Upward sloping. B) Downward sloping. Show Answer Correct Answer: A) Upward sloping. 7. In general, economist prefer to favor ..... based policies. A) Market. B) Regulation. Show Answer Correct Answer: A) Market. 8. At the price, neither a surplus or a shortage exists A) Equilibrium. B) Consumer surplus. C) Producer's surplus. D) Dead weight. Show Answer Correct Answer: A) Equilibrium. 9. A positive externality is something that ..... society A) Benefits. B) Harms. Show Answer Correct Answer: A) Benefits. 10. Going to the gym and seeing results, is a form of ..... externalities. A) Positive. B) Negative. Show Answer Correct Answer: A) Positive. 11. A price ceiling will result in a A) Shortage. B) Surplus. C) Equilibrium price. D) Equilibrium quantity. Show Answer Correct Answer: A) Shortage. 12. If a product has many substitutes, then the product is likely A) Elastic. B) Inelastic. C) Perfectly inelastic. D) Unit elastic. Show Answer Correct Answer: A) Elastic. 13. 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. 14. A large number of cars polluting the air could be an example of A) Negative externalities. B) Public goods. C) Asymmetric information. D) None of above. Show Answer Correct Answer: A) Negative externalities. 15. How many firms are there in a monopoly? A) 1. B) 2-5. C) Many. D) None of above. Show Answer Correct Answer: A) 1. 16. From an economic standpoint, government intervention is justified A) When the private sector is larger than public sector. B) Because the government will encourage the production of private goods. C) Because the government can increase the level of market power of private businesses. D) When the market mechanism fails to achieve the optimal mix of output. Show Answer Correct Answer: D) When the market mechanism fails to achieve the optimal mix of output. 17. Which of the following best represents a positive externality? A) Purchasing a pass for an amusement park. B) Being disturbed by neighboring construction noise. C) Dumping waste on someone else' s property. D) Enjoying watching birds at a neighbor's bird feeder. Show Answer Correct Answer: D) Enjoying watching birds at a neighbor's bird feeder. 18. The benefit to private businesses or individuals is shown in the curve ..... A) MPB. B) MSC. C) MPC. D) MSB. Show Answer Correct Answer: A) MPB. 19. Market failure results in a misallocation of resources. In some cases, this can be corrected by the government A) Subsidizing all loss-making firms. B) Restricting the manufacture of goods that generate positive externalities. C) Providing public goods. D) Placing a tax on merit goods. Show Answer Correct Answer: C) Providing public goods. 20. Which is not an example of a government safety net? A) Consumer Safety. B) Medicaid. C) Unemployment Insurance. D) Social Security. Show Answer Correct Answer: A) Consumer Safety. ← PreviousNext →Related QuizzesMarket Dynamics QuizzesEconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 3Market Failures Quiz 5Market Failures Quiz 6Market Failures Quiz 7Market Failures Quiz 8Market Failures Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books