Font size
WorksheetsMarket Failure
Total questions: 10
Worksheet time: 6mins
Which of the following is NOT a reason for market failure?
Presence of Public Goods
Presence of Positive Externalities
Perfectly competitive markets
Incomplete markets
Which of the following conditions lead to emergence of natural monopoly?
Low fixed cost
High fixed cost
Low variable cost
High variable cost
When is competition likely to be limited?
No transportation cost
Perfect information to all the participants
Presence of large number of firms
Presence of patents
There is inefficiency (in terms of output) associated with Perfect competition.
True
False
In the presence of natural monopoly, it is profitable to produce output at a point at which Price is equal to Long run marginal cost.
True
False
In Public goods, what is meant by the property of non-rivalry?
Marginal cost of an additional user is high
Marginal cost of an additional user is zero
Marginal cost is high
Marginal cost is zero
Provision of Street-light by markets could lead to :
Undersupply of streetlights
Oversupply of streetlights
Optimal supply of streetlights
No supply of streetlights
Will the firm generating externality depicted by the above diagram, overproduce or underproduce the good?
Overproduce
Underproduce
Which of the following are reasons for markets to be incomplete?
Undersupply of Innovation
Presence of Asymmetric information
Both of them
None of them
What do you understand by the term "market failure"?
