Markets and Market Structures Quiz

What does the circular flow model represent in an economy?

• The flow of factors of production, money, goods, and services

• The flow of only goods and services

• The flow of only money

• The flow of only factors of production

What does the character suggest is necessary for proper motivation?

• Proper compensation

• More time

• A better environment

• Encouragement

Which of the following is a problem related to public goods as per the document?

• Public Loss from Private Goods

• Private Gain from Public Goods

• Increased Public Spending

• Decreased Public Access

What is the nickname given to externalities?

• Ripple effect

• Spillover effect

• Domino effect

• Cascade effect

If a toxic waste dump is built next door, what type of market flaw does this represent?

• Positive externality

• Negative externality

• Market equilibrium

• Supply and demand

Which of the following is a consequence of negative externalities?

• Succeeded businesses

• Longer lives

• Higher prices

• Less crime

What is an example of a positive externality?

• Tax increases

• Lower property value

• Succeeded businesses

• Illness or disease

How do people mostly benefit from positive externalities?

• Without realizing

• By paying more

• By reducing consumption

• By increasing taxes

What often happens as companies get larger?

• They reduce their workforce

• They often buy or merge

• They lower their prices

• They increase competition

What action might the government take if a merger results in less competition?

• Approve the merger

• Ignore the merger

• Prevent the merger

• Encourage the merger