Economics MCQs

Page No. 248

Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ?


aaggregate supply and aggregate demand


bthe supply and demand for loanable funds


cthe supply and demand for money


d the supply and demand for labor



Satellite television subscription and television detection devices are ways in which broadcasting companies address the ________ problem?


a externality


b market imperfection


cdeadweight burden


dfree rider


View Answer free rider

A good example of a public good is ?


apublic transport


bthe national health service


cnational defence


drail transport


View Answer national defence

Market failure may arise because of ?


a imperfect competition


btaxation


c missing markets


d all of the above


View Answer all of the above

If my neighbour burns garden waste causing my house to fill with smoke this is an example of ?


aa production externality


ba second-best solution


c transaction costs


d a consumption externality



A competitive equilibrium is Pareto-efficient because ?


aProducers are price takers


bconsumers and producers face the same prices


cmarginal costs and benefits are equal


dAll of the above


View Answer All of the above

In the insurance industry, high-risk customers are more likely to take out insurance. This is an example of ?


amoral hazard


brisk aversion


cadverse selection


da poor gamble


View Answer adverse selection

In Nash equilibrium each player chooses the best strategy ?


aAssuming other players move first


bdominated by the other players


cgiven the strategies of other players


d that is a credible threat



When a market is contestable, incumbent firms must __________ to avoid the entry of new competitors?


a behave like competitive firms


bagree to act together


c differentiate their products


dpractice price discrimination



All of the following are types of imperfect competition except ?


amonopolistic competition


boligopoly


cmonopoly


dunfair competition


View Answer unfair competition

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