Question 1
Public goods are characterised by:
A.
Rivalry only B.
Perfect information C.
High PED only D.
Non-rivalry and non-excludability
Question 2
What is meant by social cost?
A.
Total benefit to society. B.
S > D. C.
S = D at equilibrium. D.
Total cost to society.
Question 3
What is meant by excess demand?
A.
Where social benefit equals social cost. B.
Asymmetric or incomplete information. C.
Resources not used to maximise welfare. D.
D > S.
Question 4
What is meant by allocative efficiency?
A.
S = D at equilibrium. B.
S > D. C.
Third-party costs/benefits. D.
Too much or too little produced/consumed vs socially optimum.
Question 5
What is meant by excess supply?
A.
S and D setting market price. B.
D > S. C.
Resources not used to maximise welfare. D.
S > D.
Question 6
What is meant by externalities?
A.
S and D setting market price. B.
S = D at equilibrium. C.
Total cost to society. D.
Third-party costs/benefits.
Question 7
What is meant by socially optimum output?
A.
Third-party costs/benefits. B.
Resources not used to maximise welfare. C.
Where social benefit equals social cost. D.
S = D at equilibrium.
Question 8
What is meant by information gaps?
A.
Total cost to society. B.
Resources not used to maximise welfare. C.
Non-rival and non-excludable. D.
Asymmetric or incomplete information.
Question 9
Market failure occurs when:
A.
S always equals D B.
Output differs from social optimum C.
Prices always rise D.
There is no government
Question 10
What is meant by market failure?
A.
Resources not used to maximise welfare. B.
Where social benefit equals social cost. C.
Too much or too little produced/consumed vs socially optimum. D.
Total benefit to society.
Back to practice 