Direct Provision Evaluation - Economics

1. The production of which type of goods, given below, has

to be financed by the government?

• A Capital goods

• B Consumer goods

• C Merit goods

• D Public goods

2. A government decides to subsidise rail travel. What will

be an external benefit of this move?

• A A rise in government expenditure

• B Increased crowding on trains

• C Lower fares for train passengers

• D Reduced congestion on roads

3. A firm, concerned about its reputation, decides to install

new equipment in order to reduce the pollution created

by it. What impact will this have, on private and external

costs?

• A A fall in private costs and external costs

• B A fall in private costs and rise in external costs

• C A rise in private costs and fall in external costs

• D A rise in private costs and external costs

4. What is an argument for state intervention in an economy?

• A To encourage the consumption of harmful products

• B To increase the role of the price mechanism in allocating

  resources

• C To make distribution of income more uneven

• D To prevent private sector firms from overcharging from

  consumers