This quiz works best with JavaScript enabled. Home > Finance > Economics > Market Dynamics > Market Failures > Market Failures – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Failures Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A power company is an example of which type of monopoly? A) Geographic Monopoly. B) Technological Monopoly. C) Government Monopoly. D) Natural Monopoly. Show Answer Correct Answer: D) Natural Monopoly. 2. 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. 3. 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. 4. Is public transport a public good? A) Yes. B) No. Show Answer Correct Answer: B) No. 5. Price ceilings lead to ..... and price floors lead to ..... A) Surplus;shortage. B) Shortage;surplus. Show Answer Correct Answer: B) Shortage;surplus. 6. A market in which a single seller dominates A) Monopoly. B) Monopolistic competition. C) Natural monopoly. D) Oligopoly. Show Answer Correct Answer: A) Monopoly. 7. Consumer surplus arises in a market because: A) At the market price, quantity supplied is greater than quantity demanded. B) At the current market price, quantity demanded is greater than quantity supplied. C) Some consumers are willing to pay more than the equilibrium price but pay a lower market price. D) Some consumers are willing to pay less than the equilibrium price but pay a higher market price. Show Answer Correct Answer: C) Some consumers are willing to pay more than the equilibrium price but pay a lower market price. 8. Government monopoly A) Monopoly created and or owned by the government. B) The exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same. C) Market structure in which the average costs of production are lowest when all output is produced by a single firm. D) A government authority or license conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention. Show Answer Correct Answer: A) Monopoly created and or owned by the government. 9. A merit good will require society to make a value judgement A) False. B) True. Show Answer Correct Answer: B) True. 10. Things that are for our collective well-being are funded by our ..... A) Free markets. B) Selves. C) Emus. D) Government. Show Answer Correct Answer: D) Government. 11. The monopoly market structure is the opposite of the perfect competition market structure. A) False. B) True. Show Answer Correct Answer: B) True. 12. Which categories of goods are rival in consumption? 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: B) Private goods and common resources. 13. Which of the following is an example of companies in monopolistic competition? A) AT&T, Universal Studios, Kellogg's. B) Netflix, Hulu, Amazon Prime. C) Nike, Regal Cinemas, Toyota. D) Coca-Cola, Adidas, General Electric. Show Answer Correct Answer: B) Netflix, Hulu, Amazon Prime. 14. A market for a good or service where there is only one supplier, or that is dominated by one supplier ..... A) Monopoly. B) Collusion. C) Barriers to entry. D) Perfect competition. Show Answer Correct Answer: A) Monopoly. 15. Who tries to prevent market failures due to negative externalities? A) Merchant Marines. B) Porch Pirates. C) The FBI. D) The Government. Show Answer Correct Answer: D) The Government. 16. When companies that form on oligopoly cooperate together to set or fix prices at a given level, they are engaging in A) Cartel. B) Non-Price Competition. C) Collusion. D) Price Leadership. Show Answer Correct Answer: D) Price Leadership. 17. Which of the following is not a public good? A) Buses. B) Flood Control Systems. C) Street Lights. D) The Army. Show Answer Correct Answer: A) Buses. 18. Which of the following statements is true about externalities? A) When externalities exist, resources are allocated efficiently. B) When positive externalities exist, efficiency is improved by taxing the product. C) From society's point of view, the output of goods for which a positive externality exists is too low. D) The price system overproduces goods with positive externalities. Show Answer Correct Answer: C) From society's point of view, the output of goods for which a positive externality exists is too low. 19. Products that are offered are identical in A) Monopolistic competition. B) Perfect competition. C) Oligarchy. D) Monopoly. Show Answer Correct Answer: B) Perfect competition. 20. Something with a positive impact on others A) Negative Externality. B) Positive Externality. Show Answer Correct Answer: B) Positive Externality. 21. Which market structure would be considered the most competitive because it has the most number of sellers? A) Monopolistic competition. B) Monopoly. C) Oligopoly. D) Perfect (pure) competition. Show Answer Correct Answer: D) Perfect (pure) competition. 22. Government subsidies have the effect of A) Raising production costs. B) Lowering output. C) Lowering the cost of production. D) Reducing supply. Show Answer Correct Answer: C) Lowering the cost of production. 23. The actions of an individual seller do not affect the overall supply or price of a good or service. A) Perfect Competition. B) Monopolistic Competition. C) Monopoly. D) Oligopoly. Show Answer Correct Answer: A) Perfect Competition. 24. A price floor is a government set price ..... equilibrium, like ..... A) Above, minimum wage. B) Below, minimum wage. C) Above, rent controls. D) Below, rent controls. Show Answer Correct Answer: A) Above, minimum wage. 25. Which of the following is not an example of an inelastic product? A) Dr. Services. B) Milk and Bread. C) Gasoline. D) Chevy Trucks. Show Answer Correct Answer: D) Chevy Trucks. 26. 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. 27. 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. 28. Market based policies are policies that do not manipulate the market in any way. A) False. B) True. Show Answer Correct Answer: A) False. 29. 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 make some new friends. B) The student's parents have to drive him or her to the food pantry. C) The student might learn a new skill. D) The student might decide to volunteer two days a week. Show Answer Correct Answer: B) The student's parents have to drive him or her to the food pantry. 30. A ..... is a maximum price sellers are allowed to charge for a good. It's an upper limit for the price. A) Shortage. B) Surplus. C) Equilibrium. D) Price ceiling. Show Answer Correct Answer: D) Price ceiling. ← PreviousNext →Related QuizzesMarket Dynamics QuizzesEconomics QuizzesMarket Failures Quiz 1Market Failures Quiz 2Market Failures Quiz 3Market Failures Quiz 4Market Failures Quiz 5Market Failures Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books