Which one of the following is associated with a missing market?

The production of a negative externality

A market is defined as being in equilibrium when

there is no tendency for the market price to change

Specialisation and the division of labour require

a means of exchanging goods and services

Which one of the following would cause a rightward shift of the supply curve from S1 to S2?

A reduction in the rate of Value Added Tax on Good X

Public goods result in market failure because

a market for the product is unlikely to become established.

studbud

Economics A Level AQA Unit 1 Quiz 2

10 termsStudBud Administration810 plays

Economics A Level AQA Unit 1 Quiz 2 Uses questions from AS Exam 2015. #economics #aqa

Flashcards10 cardsFPractice quizPHost liveL

Questions 10

Answers

1
A government subsidy would cause the largest fall in the price of a product if its PED were
Between -1 and 0
Lower than -1
Infinity
-1
2
Which one of the following is associated with a missing market?
The production of a negative externality
A monopoly restricting output
A firm deciding to produce a private good
A government subsidising agricultural production
3
A market is defined as being in equilibrium when
prices are at their lowest possible level
there is maximum output at minimum cost
there is no tendency for the market price to change
consumer satisfaction is maximised.
4
Specialisation and the division of labour require
firms to be productively efficient.
the economy to be on its production possibility boundary.
a means of exchanging goods and services
competitive markets
5
Which one of the following would cause a rightward shift of the supply curve from S1 to S2?
The creation of a monopoly by the firms supplying Good X
A reduction in the rate of Value Added Tax on Good X
A decrease in the cost of production of a substitute good
An increase in the demand for Good X
6
The PED for a good is -0.6. If the firm raises the price of the good, its revenues will
stay the same
fall by less than 6 per cent
rise
fall by more than 6 per cent
7
The total amount spent by the government on subsidies is represented by the area
FHJL
EGKM
OFLR
OHJR
8
Which one is true for a normal good with a downward sloping demand curve?
B
D
C
A
9
Public goods result in market failure because
pure public goods are both rival and excludable
a market for the product is unlikely to become established.
the external benefits exceed the private benefits
the social cost of public goods exceeds the social benefit
10
To achieve a price of OP2 through intervention buying, the government would have to spend
OP2 x OQ2
OP1 x OQ1
OP2 x Q2Q3
OP2 x OQ3

Economics A Level AQA Unit 1 Quiz 2 Flashcards | StudBud