This quiz works best with JavaScript enabled. Home > Economics > Market Dynamics > Market Failures > Market Failures – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. Education is a negative externality. A) False. B) True. Show Answer Correct Answer: A) False. 3. Factors that make it difficult for new firms to enter a market are called A) Barriers to entry. B) Factors of production. C) Limited supply. D) Monopolistic Outlook. Show Answer Correct Answer: A) Barriers to entry. 4. Market failure in which there is unintended harm or inconvenience to a third party. A) Positive externality. B) Negative externality. C) Economies of scale. D) Public goods. Show Answer Correct Answer: B) Negative externality. 5. What is rent control? A) A price ceiling that imits the amount a property owner can charge for renting out a home, apartment or other real estate. B) A price floor that imits the amount a property owner can charge for renting out a home, apartment or other real estate. C) An order that sets a cap on how much rent can be raised over time. D) None of above. Show Answer Correct Answer: A) A price ceiling that imits the amount a property owner can charge for renting out a home, apartment or other real estate. 6. The proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own, is called A) The Pigovian theorem. B) A corrective tax. C) The externality theorem. D) The Coase theorem. Show Answer Correct Answer: D) The Coase theorem. 7. An economic side effect of a good/service that generates benefits or costs to someone other than the person deciding how much to produce or consume. A) Side effects. B) Public Goods. C) Externalities. D) Monopolies. Show Answer Correct Answer: C) Externalities. 8. Again consider the market for plastic. If you would like to solve the negative externalities problem, how much tax would you charge for the plastic production? A) Equal to the social cost at $ 5 per ton. B) Equal to the private cost at $ 3.5 per ton. C) Equal to the value of positive externalities at $ 1.5 per ton. D) Equal to the value of negative externalities at $ 1.5 per ton. Show Answer Correct Answer: D) Equal to the value of negative externalities at $ 1.5 per ton. 9. Which of the following industries is most likely to exist in a purely competitive market? A) Shoes. B) Wheat. C) Bottled water. D) Personal computers. Show Answer Correct Answer: B) Wheat. 10. In which market structure is there NO competition? A) Perfect Competition. B) Monopolistic Competition. C) Monopoly. D) Oligopoly. Show Answer Correct Answer: C) Monopoly. 11. Public goods are A) Rival and excludable. B) Non-rival and non-excludable. C) Rival and non-excludable. D) Non-rival and excludable. Show Answer Correct Answer: B) Non-rival and non-excludable. 12. The ups and downs of the economy, which the government must sometimes step in to stabilize due is known as the A) Regulatory cycle. B) Business cycle. C) Fiscal Policy. D) Monetary Policy. Show Answer Correct Answer: B) Business cycle. 13. Market structure in which a few very large sellers dominate the industry. A) Perfect competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: C) Oligopoly. 14. The US Postal Service is an example of which type of monopoly? A) Government Monopoly. B) Natural Monopoly. C) Technological Monopoly. D) Geographic Monopoly. Show Answer Correct Answer: A) Government Monopoly. 15. A power company is an example of which type of monopoly? A) Government Monopoly. B) Natural Monopoly. C) Technological Monopoly. D) Geographic Monopoly. Show Answer Correct Answer: B) Natural Monopoly. 16. If the government removes a tax on a good, then the price paid by buyers will A) Increase, and the price received by sellers will increase. B) Increase, and the price received by sellers will decrease. C) Decrease, and the price received by sellers will increase. D) Decrease, and the price received by sellers will decrease. Show Answer Correct Answer: C) Decrease, and the price received by sellers will increase. 17. What is the name of people who benefit without paying? A) Free riders. B) Free takers. C) Free loaders. D) None of above. Show Answer Correct Answer: A) Free riders. 18. Is public transport a public good? A) Yes. B) No. Show Answer Correct Answer: B) No. 19. Price ceilings lead to ..... and price floors lead to ..... A) Surplus;shortage. B) Shortage;surplus. Show Answer Correct Answer: B) Shortage;surplus. 20. A market in which a single seller dominates A) Natural monopoly. B) Monopoly. C) Oligopoly. D) Monopolistic competition. Show Answer Correct Answer: B) Monopoly. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books