Market Intervention and Equilibrium Quiz
Test your knowledge on market equilibrium, intervention methods, government policies, and their impacts with these quiz questions.
#1
In economics, what does 'market equilibrium' refer to?
A state where supply exceeds demand
A state where demand exceeds supply
A state where supply and demand are equal
A state where there is no supply or demand
#2
What is a common method of market intervention used by governments to control prices?
Subsidies
Taxation
Deregulation
Free trade agreements
#3
How does a price ceiling impact the market equilibrium?
It creates a surplus of goods
It creates a shortage of goods
It has no impact on equilibrium
It leads to an increase in demand
#4
What is the concept of 'deadweight loss' in the context of market intervention?
The loss of consumer surplus due to intervention
The loss of producer surplus due to intervention
The overall loss in market efficiency
The loss of tax revenue in the market
#5
Which of the following is an example of a non-price form of market intervention?
Price floor
Subsidy
Taxation
Deregulation
#6
How does a government's implementation of a price floor impact the market?
It creates a surplus of goods
It creates a shortage of goods
It has no impact on equilibrium
It leads to a decrease in demand
#7
What is the primary goal of market intervention policies?
To increase competition
To stabilize prices
To promote monopolies
To reduce government involvement
#8
How can a government use open market operations to influence the economy?
By regulating foreign trade
By buying or selling government securities
By controlling interest rates
By nationalizing industries
#9
What is the main drawback of using tariffs as a market intervention strategy?
It reduces government revenue
It leads to overproduction
It can trigger trade wars
It has no impact on imports
#10
How does a government subsidy affect the supply and demand equilibrium in the market?
It increases both supply and demand
It decreases both supply and demand
It increases supply and decreases demand
It decreases supply and increases demand
#11
What is the 'Laffer curve' often associated with in the context of market intervention?
Taxation
Subsidies
Price ceilings
Monopolies
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