#1
Which of the following is a characteristic of market failure?
Inefficient allocation of resources
ExplanationResources not distributed optimally leading to inefficiency.
#2
What is a common cause of market failure?
Externalities
ExplanationExternal factors causing market inefficiencies.
#3
Which of the following is an example of a public good?
Electricity
ExplanationShared utility accessible to all.
#4
What is the concept of market equilibrium?
A situation where quantity demanded equals quantity supplied
ExplanationBalanced market demand and supply.
#5
Which of the following is an example of a negative externality?
Air pollution from industrial factories
ExplanationDetrimental effects imposed on others by production.
#6
What is the concept of consumer surplus?
The difference between what consumers are willing to pay and what they actually pay
ExplanationBenefit gained by consumers from lower prices.
#7
Which of the following is an example of a positive externality?
Education benefiting society
ExplanationBeneficial spillover effects of education on the community.
#8
What concept refers to the situation where one party in a transaction has more information than the other party?
Asymmetric information
ExplanationInformation imbalance affecting transactions.
#9
What does the term 'tragedy of the commons' refer to?
Overconsumption of common resources leading to depletion
ExplanationExploitation of shared resources causing depletion.
#10
Which of the following is NOT a characteristic of public goods?
Provided by private firms
ExplanationGoods not typically provided by private entities.
#11
Which of the following is an example of a common-pool resource?
Fish in the open ocean
ExplanationShared resources open to overuse.
#12
What is the concept of Pareto efficiency in economics?
A situation where it is impossible to make one person better off without making someone else worse off
ExplanationOptimal allocation without harming others.
#13
Which market structure is most prone to inefficient outcomes?
Monopoly
ExplanationSingle seller dominance leading to inefficiencies.
#14
What is the Coase Theorem?
The idea that private parties can solve externality problems through bargaining
ExplanationPrivate negotiation to resolve externalities.
#15
What is a moral hazard in economics?
The tendency of insured individuals to take greater risks because they are protected against the consequences
ExplanationReduced caution due to protection against risks.
#16
What is the tragedy of the anticommons?
Monopolization of resources by a single entity
ExplanationExclusivity of resources leading to inefficiency.
#17
In economics, what does the term 'deadweight loss' refer to?
The loss in total surplus that occurs when resources are not allocated efficiently
ExplanationWaste due to market inefficiencies.
#18
What is the 'free rider problem' in economics?
A situation where individuals benefit from a public good without paying for it
ExplanationEnjoying communal benefits without contribution.