Pak
QuizHub
Home
Important MCQs
Past Papers
About
Contact
Privacy
Market
/
MCQs
Market – MCQs
91 questions. Click to practice.
Show Answers
Correct options are highlighted when revealed.
1.
Broadcasting firms use satellite TV subscriptions and signal detection tools primarily to combat which issue?
spillover effect
market failure
efficiency loss
free rider
information asymmetry
2.
Which of the following is a classic example of a public good?
City bus services
Government-funded healthcare
National security
Train services
3.
Which of the following factors can lead to market failure?
Imperfect market competition
Government-imposed taxes
External effects impacting third parties
Absence of certain markets
All of the above
4.
When a neighbor burns yard debris and smoke enters your home, what type of externality does this represent?
An externality related to production activities
A suboptimal or second-best outcome
Costs associated with making a transaction
An externality arising from consumption
None of the above
5.
Why is a competitive equilibrium considered Pareto efficient?
Because producers accept prices without influence
Since both consumers and producers encounter identical prices
Due to the equality of marginal costs and marginal benefits
As market prices match both marginal costs and marginal benefits
All of the above reasons combined
6.
Within the insurance sector, individuals who pose a greater risk tend to purchase insurance more frequently. What concept does this illustrate?
moral hazard
aversion to risk
adverse selection
an unwise bet
7.
In a Nash equilibrium, how does each player select their strategy?
By presuming other players have acted before them
By choosing a strategy overshadowed by opponents
By selecting the optimal strategy based on others' choices
By opting for a strategy that serves as a believable threat
8.
In a contestable market, how must existing companies act to prevent new competitors from entering?
operate as if in a perfectly competitive market
collaborate with each other
make their products distinct
use price discrimination strategies
9.
Which of the following is NOT classified as a form of imperfect competition?
Monopolistic competition
Oligopoly
Monopoly
Unfair competition
10.
What does tax shifting refer to?
The method used to design a tax system
The final allocation of who bears the tax burden
The situation where taxes lead to higher prices but lower wages
When households change their actions to evade paying a tax
11.
Which type of externality is the government most inclined to provide financial support for?
Adverse externalities
Beneficial externalities
Monopoly markets
Oligopoly markets
None of the above
12.
The government plans to impose a tax on cigarettes to generate funds for healthcare benefits. Given that cigarette demand is currently price inelastic, which of the following statements is correct?
This tax will generate minimal revenue in both the short run and long run because demand is price inelastic.
Over time, the tax may yield less revenue than expected since cigarette demand is likely to become more sensitive to price changes.
This approach is highly effective for raising revenue in both the immediate and distant future, as there are no alternatives to cigarettes.
No tax revenue will be collected because cigarette sellers will reduce prices by the tax amount, leaving consumer prices unchanged.
The tax will immediately eliminate cigarette consumption due to high price sensitivity.
13.
Which of the following is considered an indirect tax?
Value Added Tax (VAT)
Tax on inheritance
Personal income tax
Corporate profits tax
14.
What would economists expect to happen if the government sets a minimum wage for adult employees?
Overall wages would decrease as companies attempt to reduce expenses
Employment opportunities for younger workers would decline
Businesses that rely on low-wage labor would face higher costs and increased prices
The level of unemployment would rise
15.
In a free market economy, rationing typically happens when which factor rises?
cost
amount
consumer demand
availability
production
16.
According to economic principles, when is rationing necessary?
When inflation takes place
In the presence of externalities
During the production of merit goods
When demand surpasses supply
When government intervention is minimal
17.
What is the result when a price ceiling is established below the market equilibrium price?
Prices will decrease
Prices will rise
There will be a shortage of goods
There will be a surplus of goods
18.
Which characteristic defines a public good?
It is supplied by governmental authorities
It is available at no charge
It is both non-excludable and non-rivalrous in consumption
It generates external costs
It is privately owned
19.
Why do agricultural prices often experience significant fluctuations?
Because supply responds strongly to price changes
Because demand varies greatly with price shifts
Because the supply remains constant over time
Because both demand and supply have low responsiveness to price changes
Because government policies regulate prices strictly
20.
What happens in a market when the government sets a price higher than the equilibrium price?
The market reaches a new balance point
A surplus of goods occurs
There is a shortage of products
Supply and demand are equal
Demand exceeds supply
← Previous
Page 1 of 5
Next →