Economics MCQs

Page No. 251

Except for taxes to offset ______ taxes are ______?


a imperfect competition popular


b externalities , distortionary


c inequality , a first best option


dpoor health, unnecessary



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 ?


aPrivate good


bmerit good


c public good


d abundant good


View Answer public good

Markets sometimes fail to exist because of________?


aexternalities


b the free-rider problem


ca and b


da and c


View Answer a and b

Externalities arise because there is a divergence between ________ and _________?


aprivate costs, private benefits


b private costs, social costs or benefits


c social costs, social benefit


d insiders, outsiders



The allocation of resources is not efficient if ?


a the marginal cost of production does not equal society’s marginal benefit


bthe distribution is inequitable


ceconomic growth is low


dunemployment is high



We cannot say whether one allocation of resources is better than another allocation because ?


a some people can’t count


b some people may not be permanent resident


c not all economic activity is legal


d We can’t make value judgments to compare different people’s welfare



An allocation is Pareto-efficient if no reallocation of resources would make some people _______ without making others ________?


aworse off; worse off


bbetter off; better off


c better off; worse off


dequal, unequal



Moral hazard means that the act of insuring ____ that the desired outcome will occur?


areduces the likelihood


b increases the likelihood


cguarantees


dnone of the above



A dominant strategy is ?


aa wining strategy


ba losing strategy


c a players best strategy when moving first


d a player’s best strategy whatever the strategies adopted by rivals



The prisoners Dilemma Game demonstrates that ?


a players are better of to act independently


bmonopoly is better than competition


cpeople will always cheat


dplayers are better off if they co-operate



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