Market Equilibrium and the Effects of Government Interventions Quiz

Test your knowledge of microeconomics with questions on market equilibrium, price controls, subsidies, taxes, and more.

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In economics, what does 'market equilibrium' refer to?

The point where quantity demanded equals quantity supplied

The point where government interventions are highest

The point where quantity demanded exceeds quantity supplied

The point where quantity supplied exceeds quantity demanded

Which of the following is an effect of a price ceiling?

Surplus

Shortage

Increase in price

Decrease in demand

What happens to market equilibrium price and quantity when a subsidy is introduced?

Price decreases, quantity decreases

Price decreases, quantity increases

Price increases, quantity decreases

Price increases, quantity increases

What is the likely result of a price floor set above the equilibrium price?

Excess supply

Excess demand

Equilibrium price

Equilibrium quantity

How does a quota affect the market equilibrium?

Increases consumer surplus

Decreases producer surplus

Causes a shortage

Causes a surplus

What happens to market equilibrium price and quantity when both demand and supply increase?

Price increases, quantity decreases

Price decreases, quantity increases

Price increases, quantity increases

Price decreases, quantity decreases

Which type of government intervention aims to correct a positive externality?

Price ceiling

Subsidy

Price floor

Tax

What is the main effect of imposing a tariff on imported goods?

Increase in domestic production

Decrease in domestic consumption

Increase in consumer surplus

Decrease in producer surplus

What is the primary goal of a tax on a good with negative externalities?

To decrease production

To increase consumption

To internalize the externality

To encourage exports

#10

How do subsidies affect consumer and producer surplus?

Decrease consumer surplus, increase producer surplus

Increase consumer surplus, decrease producer surplus

Increase consumer surplus, increase producer surplus

Decrease consumer surplus, decrease producer surplus

#11

What is deadweight loss in economics?

Loss in consumer and producer surplus due to market inefficiency

Increase in government revenue

The total amount of surplus in a market

The maximum price consumers are willing to pay for a good

Market Equilibrium and the Effects of Government Interventions Quiz

In economics, what does 'market equilibrium' refer to?

Which of the following is an effect of a price ceiling?

What happens to market equilibrium price and quantity when a subsidy is introduced?

What is the likely result of a price floor set above the equilibrium price?

How does a quota affect the market equilibrium?

What happens to market equilibrium price and quantity when both demand and supply increase?

Which type of government intervention aims to correct a positive externality?

What is the main effect of imposing a tariff on imported goods?

What is the primary goal of a tax on a good with negative externalities?

How do subsidies affect consumer and producer surplus?

What is deadweight loss in economics?

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