market MCQs – Page 5

Practise focused market questions with marked answers for exam preparation and subject revision.

market Mcqs
81. If the price was fixed below the equilibrium price there would be ?
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A. Excess demand

B. Excess supply

C. Downward pressure on prices

D. Equilibrium

82. If the consumption of good by one person does not reduce the quantity available by others and nobody can be easily excluded from consumption, we are referring to a ?
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A. public good

B. Private good

C. abundant good

D. merit good

83. Merit goods are ?
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A. Not provided in the free market economy

B. Over provided in the free market economy

C. Provided free

D. Under provided in the free market economy
84. A public good will ?
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A. Be under provided in the free market

B. Has no opportunity cost

C. Not be provided in the free market

D. Be over provided in the free market

85. When a market is contestable, incumbent firms must __________ to avoid the entry of new competitors?
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A. practice price discrimination

B. behave like competitive firms

C. agree to act together

D. differentiate their products

86. Economics say that there has to be some from of rationing whenever ?
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A. merit goods are produced

B. inflation occurs

C. there are externalities

D. there is excess demand
87. Markets sometimes fail to exist because of________?
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A. a and c

B. the free-rider problem

C. externalities

D. a and b
88. The problem posed by a natural monopoly is that it faces a _____ This means that _______?
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A. decreasing average cost curve, marginal cost lies below average cost

B. decreasing average cost curve marginal cost lies above average cost

C. increasing average cost curve, marginal cost lies above average cost

D. increasing average cost curve, marginal cost lies below average cost

89. An inferior good is one for which an increase in income causes a(n) ?
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A. increase in demand

B. increase in supply

C. decrease in supply

D. decrease in demand
90. If demand increase in a market this will usually lead to ?
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A. A higher equilibrium price and lower output

B. A lower equilibrium price and higher output

C. A higher equilibrium price and output

D. A lower equilibrium price and output

91. A movement along the supply curve may be caused by ?
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A. A change in technology

B. A change in costs

C. A change in the number of producers

D. A shift in demand