#1
What is deadweight loss in microeconomics?
The loss incurred by consumers due to a tax
The loss incurred by producers due to a tax
The loss of total surplus in a market due to inefficiency
The loss of government revenue due to tax evasion
#2
Which of the following is NOT a source of market distortion?
Price ceilings
Subsidies
Perfect competition
Tariffs
#3
What is the primary goal of a government when it imposes taxes on certain goods?
To increase producer surplus
To reduce consumer surplus
To generate revenue
To decrease deadweight loss
#4
Which of the following is an example of a negative externality?
A beekeeper's bees pollinate nearby crops
A factory emits pollution that damages nearby crops
A restaurant gives out free samples to attract customers
A farmer grows organic vegetables
#5
What is the main reason for the occurrence of deadweight loss?
Government intervention in markets
Market equilibrium
Market inefficiency
Perfect competition
#6
Which of the following is an example of a market distortion caused by government-imposed quotas?
Price floor
Price ceiling
Tariff
Rent control
#7
In a competitive market without any externalities, what is the condition for efficiency?
Price equals marginal cost
Price equals average cost
Price equals marginal revenue
Price equals total cost
#8
How does a price ceiling typically affect the market?
It leads to a surplus of goods
It leads to a shortage of goods
It increases consumer surplus
It has no effect on the market
#9
What happens to consumer surplus when a tax is imposed on a good?
It increases
It decreases
It remains the same
It fluctuates randomly
#10
Which of the following policies aims to correct a positive externality?
Subsidies
Taxes
Price ceilings
Tariffs
#11
What is the term used to describe the situation when a good or service is consumed without being paid for?
Positive externality
Negative externality
Social cost
Free rider problem
#12
How does a subsidy affect the equilibrium price and quantity in a market?
Decreases price, increases quantity
Increases price, decreases quantity
Increases both price and quantity
Decreases both price and quantity
#13
What is the term used to describe a situation where a single buyer or seller has control over the market?
Oligopoly
Monopoly
Perfect competition
Monopsony
#14
In the context of market power, what does the term 'monopsony' refer to?
A market with one buyer and many sellers
A market with many buyers and one seller
A market with perfect competition
A market with few sellers and few buyers
#15
In a monopolistically competitive market, how do firms differentiate their products?
By offering lower prices than competitors
By selling identical products
By advertising and branding
By colluding with other firms
#16
In the context of externalities, what is the term used to describe the situation where one party bears the costs of an economic transaction while another party reaps the benefits?
Market failure
Positive externality
Negative externality
Social cost
#17
In monopolistic competition, how do firms differentiate their products from competitors?
By selling identical products
By offering lower prices than competitors
By producing unique products
By colluding with other firms