#1
In economics, what does 'market equilibrium' refer to?
The point where quantity demanded equals quantity supplied
ExplanationBalance between supply and demand.
#2
Which of the following is an effect of a price ceiling?
Shortage
ExplanationDecrease in available goods or services.
#3
What happens to market equilibrium price and quantity when a subsidy is introduced?
Price decreases, quantity increases
ExplanationDecrease in price, increase in quantity.
#4
What is the likely result of a price floor set above the equilibrium price?
Excess supply
ExplanationMore goods than demanded.
#5
How does a quota affect the market equilibrium?
Causes a shortage
ExplanationLimits availability of goods.
#6
What happens to market equilibrium price and quantity when both demand and supply increase?
Price increases, quantity increases
ExplanationRise in both price and quantity.
#7
Which type of government intervention aims to correct a positive externality?
Subsidy
ExplanationEncouragement for positive outcomes.
#8
What is the main effect of imposing a tariff on imported goods?
Increase in domestic production
ExplanationBoosts local manufacturing.
#9
What is the primary goal of a tax on a good with negative externalities?
To internalize the externality
ExplanationIncorporating external costs.
#10
How do subsidies affect consumer and producer surplus?
Increase consumer surplus, increase producer surplus
ExplanationEnhanced benefits for consumers and producers.
#11
What is deadweight loss in economics?
Loss in consumer and producer surplus due to market inefficiency
ExplanationWasteful inefficiency.