Market Efficiency and Welfare in Macroeconomics MCQs
Market Efficiency and Welfare in Macroeconomics MCQs
Answer these Market Efficiency and Welfare in Macroeconomics MCQs and see how sharp is your knowledge of Market Efficiency and Welfare in Macroeconomics.
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1: When a nation imports a good, its ________ surplus increases and its ________ surplus increases.
A. Consumer; consumer
B. Producer; producer
C. Producer; consumer
D. Total; consumer
2: What does market efficiency refer to in macroeconomics?
A. The ability of markets to allocate resources optimally and equitably
B. The concentration of market power among a few firms
C. The absence of market failures in the economy
D. The level of government intervention in market activities
3: Which of the following is a characteristic of a perfectly competitive market?
A. High barriers to entry
B. A small number of firms dominating the market
C. Homogeneous products and many buyers and sellers
D. Limited consumer choice and product differentiation
4: In a perfectly competitive market, what happens if there is an excess supply of a good?
A. The price of the good increases
B. The price of the good decreases
C. Producers reduce their production levels
D. Producers lower their prices until equilibrium is reached
5: What is consumer surplus in macroeconomics?
A. The difference between the price consumers are willing to pay and the actual price they pay for a good
B. The total revenue generated by consumers in a market
C. The total amount of money spent by consumers on a specific product
D. The additional satisfaction consumers receive from consuming an extra unit of a good
6: How does an externality affect market efficiency and welfare?
A. It improves market efficiency by aligning private and social costs
B. It reduces market efficiency and leads to welfare losses
C. It has no impact on market efficiency or welfare
D. It increases consumer surplus and producer surplus in the market
7: What is the purpose of government intervention in addressing market failures?
A. To eliminate competition and establish monopolies
B. To regulate prices and control market outcomes
C. To correct inefficiencies and promote overall welfare
D. To discourage market participation and discourage entrepreneurship
8: Which of the following is an example of a public good?
A. A private car
B. National defense
C. Bottled water
D. Airline tickets
9: How does income redistribution impact market efficiency and welfare?
A. It improves market efficiency by reducing income inequality
B. It has no impact on market efficiency or welfare
C. It can lead to trade-offs between equity and efficiency
D. It increases consumer surplus and producer surplus in the market
10: What does the term "market failure" refer to in macroeconomics?
A. The absence of competition in a market
B. The inability of markets to allocate resources efficiently
C. The government's interference in market activities
D. The dominance of monopolies in a market
11: How does the presence of information asymmetry affect market efficiency?
A. It improves market efficiency by promoting competition and innovation
B. It reduces market efficiency by hindering informed decision-making
C. It has no impact on market efficiency
D. It leads to an equitable distribution of resources in the market
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Market Efficiency and Welfare in Macroeconomics MCQs
