Economics MCQs

Page No. 253

With a positive externality ?


a There is under-consumption in the free market


b There is over consumption in the free market


cThe government may tax to decrease production


dSociety could be made off it less was produced



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


aSupply is price elastic


b Demand is price inelastic


cThe government buys up all the excess production


dAll output must be sold at a maximum price



Merit goods are ?


aNot provided in the free market economy


b Under provided in the free market economy


cOver provided in the free market economy


dProvided free



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


aThere is excess equilibrium


bThere is excess supply


c There is excess demand


dThere is equilibrium



A public good will ?


a Be under provided in the free market


bBe over provided in the free market


cNot be provided in the free market


d Has no opportunity cost



An increase in demand for a product should ?


aIncrease equilibrium price and quantity


bDecrease equilibrium price and quantity


c Increase equilibrium price and decrease quantity


dDecrease equilibrium price and increase quantity



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


aThe price elasticity of supply is – 3


b The price elasticity of supply is – 0.2


c The price elasticity of supply is – 2


d The price elasticity of supply is infinity



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


aThe price elasticity of supply is price inelastic


bThe price elasticity of supply is price elastic


cThe price elasticity of supply is perfectly elastic


dThe price elasticity of supply is infinity



Which best describes consumer surplus ?


aThe price consumers are willing to pray for a unit


bThe cost of providing a unit


c The profits made by a firm


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



A movement along the supply curve may be caused by ?


aA change in technology


b A change in the number of producers


c A shift in demand


dA change in costs


View Answer A shift in demand

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