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

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bthe supply and demand for loanable funds

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cthe supply and demand for money

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d the supply and demand for labor

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


a externality

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b market imperfection

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cdeadweight burden

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dfree rider

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View Answer free rider

A good example of a public good is ?


apublic transport

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bthe national health service

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cnational defence

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drail transport

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View Answer national defence

Market failure may arise because of ?


a imperfect competition

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btaxation

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c missing markets

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d all of the above

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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

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ba second-best solution

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c transaction costs

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d a consumption externality

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A competitive equilibrium is Pareto-efficient because ?


aProducers are price takers

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bconsumers and producers face the same prices

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cmarginal costs and benefits are equal

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dAll of the above

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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

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brisk aversion

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cadverse selection

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da poor gamble

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View Answer adverse selection

In Nash equilibrium each player chooses the best strategy ?


aAssuming other players move first

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bdominated by the other players

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cgiven the strategies of other players

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d that is a credible threat

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


a behave like competitive firms

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bagree to act together

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c differentiate their products

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dpractice price discrimination

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All of the following are types of imperfect competition except ?


amonopolistic competition

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boligopoly

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cmonopoly

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dunfair competition

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View Answer unfair competition

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