#1
Which of the following is a characteristic of market failure?
Efficient allocation of resources
Equitable distribution of wealth
Inefficient allocation of resources
Maximized consumer surplus
#2
What is a common cause of market failure?
Perfect competition
Externalities
Monopoly
Price discrimination
#3
Which of the following is an example of a public good?
Private jet
Electricity
Exclusively branded luxury clothing
Concert tickets
#4
What is the concept of market equilibrium?
A situation where demand exceeds supply
A situation where supply exceeds demand
A situation where quantity demanded equals quantity supplied
A situation where quantity supplied exceeds quantity demanded
#5
Which of the following is an example of a negative externality?
Research and development leading to innovation
Construction of a public library
Air pollution from industrial factories
Voluntary exchange of goods between two parties
#6
What is the concept of consumer surplus?
The total revenue generated by consumers
The difference between what consumers are willing to pay and what they actually pay
The extra cost incurred by consumers due to market inefficiencies
The total value of goods and services consumed by consumers
#7
Which of the following is an example of a positive externality?
Pollution from a factory
Noise pollution from construction work
Education benefiting society
Traffic congestion
#8
What concept refers to the situation where one party in a transaction has more information than the other party?
Monopoly power
Asymmetric information
Public goods
Perfect competition
#9
What does the term 'tragedy of the commons' refer to?
Overproduction of goods in a competitive market
Overconsumption of common resources leading to depletion
Underproduction of goods in a monopolistic market
Underutilization of public goods
#10
Which of the following is NOT a characteristic of public goods?
Non-excludability
Rivalry in consumption
Non-rivalry in consumption
Provided by private firms
#11
Which of the following is an example of a common-pool resource?
Fish in the open ocean
Solar energy
Public park
Private beach resort
#12
What is the concept of Pareto efficiency in economics?
A situation where resources are distributed equally among individuals
A situation where it is impossible to make one person better off without making someone else worse off
A situation where resources are allocated based on individual preferences
A situation where the government intervenes to correct market failures
#13
Which market structure is most prone to inefficient outcomes?
Perfect competition
Monopolistic competition
Monopoly
Oligopoly
#14
What is the Coase Theorem?
The idea that private parties can solve externality problems through bargaining
The theory that monopolies naturally maximize social welfare
The principle that perfect competition leads to an equitable distribution of wealth
The concept that governments should intervene in all market transactions
#15
What is a moral hazard in economics?
The tendency of individuals to underestimate the probability of rare events
The possibility of asymmetric information in market transactions
The risk that one party may change its behavior to the detriment of another party after a transaction has occurred
The tendency of insured individuals to take greater risks because they are protected against the consequences
#16
What is the tragedy of the anticommons?
Overconsumption of common resources
Underutilization of resources due to lack of coordination
Monopolization of resources by a single entity
Depletion of resources due to excessive regulation
#17
In economics, what does the term 'deadweight loss' refer to?
The loss in consumer surplus due to a price increase
The loss in producer surplus due to a price decrease
The loss in total surplus that occurs when resources are not allocated efficiently
The loss in government revenue due to tax cuts
#18
What is the 'free rider problem' in economics?
A situation where individuals benefit from a public good without paying for it
A situation where the government provides goods and services at no cost to citizens
A situation where individuals are forced to contribute to public goods
A situation where individuals refuse to participate in market transactions