Economics MCQs

Page No. 253

With a positive externality ?


a There is under-consumption in the free market

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b There is over consumption in the free market

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cThe government may tax to decrease production

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dSociety could be made off it less was produced

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When supply increase in an agricultural market farmer’s earning might fall because ?


aSupply is price elastic

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b Demand is price inelastic

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cThe government buys up all the excess production

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dAll output must be sold at a maximum price

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Merit goods are ?


aNot provided in the free market economy

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b Under provided in the free market economy

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cOver provided in the free market economy

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dProvided free

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If the price in a market is fixed by the government below equilibrium ?


aThere is excess equilibrium

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bThere is excess supply

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c There is excess demand

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dThere is equilibrium

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A public good will ?


a Be under provided in the free market

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bBe over provided in the free market

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cNot be provided in the free market

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d Has no opportunity cost

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An increase in demand for a product should ?


aIncrease equilibrium price and quantity

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bDecrease equilibrium price and quantity

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c Increase equilibrium price and decrease quantity

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dDecrease equilibrium price and increase quantity

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A shift in supply will have more effect on price than quantity if ?


aThe price elasticity of supply is – 3

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b The price elasticity of supply is – 0.2

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c The price elasticity of supply is – 2

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d The price elasticity of supply is infinity

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A shift is demand will have more effect on price than quantity if ?


aThe price elasticity of supply is price inelastic

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bThe price elasticity of supply is price elastic

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cThe price elasticity of supply is perfectly elastic

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dThe price elasticity of supply is infinity

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Which best describes consumer surplus ?


aThe price consumers are willing to pray for a unit

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bThe cost of providing a unit

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c The profits made by a firm

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d The difference the price a consumer pays for an item and the price he/she is willing to pay

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A movement along the supply curve may be caused by ?


aA change in technology

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b A change in the number of producers

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c A shift in demand

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dA change in costs

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View Answer A shift in demand

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