Market Forces and Economic Efficiency Quiz
Test your knowledge of microeconomics with questions on market structures, consumer surplus, externalities, and economic efficiency.
#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
Few sellers with differentiated products
One seller with significant market power
Limited entry and exit barriers
#2
What happens to consumer surplus when the price of a good decreases?
It decreases
It increases
It remains unchanged
It depends on the income level of consumers
#3
Which of the following is a characteristic of a monopolistically competitive market?
Homogeneous products
Many buyers and one seller
High barriers to entry
Product differentiation
#4
What is the primary goal of antitrust laws?
To promote business consolidation
To protect consumers from unfair business practices
To restrict competition among firms
To eliminate government intervention in markets
#5
What is economic efficiency?
The allocation of resources that maximizes total production
The allocation of resources that maximizes consumer surplus
The allocation of resources that minimizes deadweight loss
The allocation of resources that maximizes producer surplus
#6
Which of the following is NOT a factor that can lead to market failure?
Externalities
Perfect information
Public goods
Market power
#7
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Total change in quantity demanded / Total change in price
Total change in price / Total change in quantity demanded
#8
In a perfectly competitive market, what happens if a firm increases its price above the equilibrium price?
It maximizes its profits
It loses all its customers
It gains market share
It sells nothing
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