Market & Non-tariff Trade Barriers(Economics ) Questions and Answers

Question 1. Satellite television subscription and television detection devices are ways in which broadcasting companies address the ________ problem?
  1.    externality
  2.    market imperfection
  3.    deadweight burden
  4.    free rider
Explanation:-
Answer: Option D. -> free rider
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 2. A good example of a public good is ?
  1.    public transport
  2.    the national health service
  3.    national defence
  4.    rail transport
Explanation:-
Answer: Option C. -> national defence
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 3. Market failure may arise because of ?
  1.    imperfect competition
  2.    taxation
  3.    externalities
  4.    missing markets
  5.    all of the above
Explanation:-
Answer: Option E. -> all of the above
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 4. A competitive equilibrium is Pareto-efficient because ?
  1.    Producers are price takers
  2.    consumers and producers face the same prices
  3.    marginal costs and benefits are equal
  4.    prices equal marginal cost and benefit
  5.    All of the above
Explanation:-
Answer: Option E. -> All of the above
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 5. If my neighbour burns garden waste causing my house to fill with smoke this is an example of ?
  1.    a production externality
  2.    a second-best solution
  3.    transaction costs
  4.    a consumption externality
Explanation:-
Answer: Option D. -> a consumption externality
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 6. All of the following are types of imperfect competition except ?
  1.    monopolistic competition
  2.    oligopoly
  3.    monopoly
  4.    unfair competition
Explanation:-
Answer: Option D. -> unfair competition
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 7. When a market is contestable, incumbent firms must __________ to avoid the entry of new competitors?
  1.    behave like competitive firms
  2.    agree to act together
  3.    differentiate their products
  4.    practice price discrimination
Explanation:-
Answer: Option A. -> behave like competitive firms
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 8. Which of the following is the government most likely to subsidies ?
  1.    Negative externalies
  2.    Positive externalities
  3.    Monopolies
  4.    Oligopolies
Explanation:-
Answer: Option B. -> Positive externalities
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 9. In Nash equilibrium each player chooses the best strategy ?
  1.    Assuming other players move first
  2.    dominated by the other players
  3.    given the strategies of other players
  4.    that is a credible threat
Explanation:-
Answer: Option C. -> given the strategies of other players
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 10. In the insurance industry, high-risk customers are more likely to take out insurance. This is an example of ?
  1.    moral hazard
  2.    risk aversion
  3.    adverse selection
  4.    a poor gamble
Explanation:-
Answer: Option C. -> adverse selection
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
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