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WorksheetsThe Limits of Markets Chapter 14
Total questions: 15
Worksheet time: 8mins
Which of the following best describes why a government might intervene in a market
To prevent positive externalities
To improve resource allocation and economic stability
To redistribute income to higher income earners
To reduce prices and competition
Which of the following is an example of a negative externality?
Decreased productive capacity
Government assistance to the industry
Social costs associated with production
Decreasing economies of scale
Which of the following best describes the role of macroeconomic policy?
It aims to increase the rate of economic growth
It focuses on influencing the behaviour of firms and industry
It aims to smooth the business cycle
It aims to improve the distribution of income
Which of the following best describes monopolisation?
Where a firm uses its dominant market position to eliminate existing competition
When a firm sells the same product in different markets at different prices
When firms get together and agree on market sharing arrangements
When a firm sets conditions for supply that exclude firms within the distribution channel from dealing with competitors
Which of the following is the free market most likely to under-produce
Demerit goods
Goods in perfectly competitive markets
Goods with negative externalities
Goods that are non-excludable
Which of the following is an example of a natural monopoly?
Sydney Water
Commonwealth Bank
iiNet Limited
Qantas
Which of the following would have a positive externality?
A decrease in the price of cars and petrol
Research and development spending by companies
A large open air heavy metal rock concert
The discovery of a new oil and gas field in Bass Strait
A number of petrol stations all agree to increase the price of petrol. What type of abuse of market power is this?
Exclusive dealing
Price discrimination
Collusion
Misleading and deceptive conduct
Which of the following is a negative effect of a boom in economic activity
Falling national income
Lower unemployment
Faster depletion of natural resources
Lower inflation
Which of the following is an example of a policy that a government can utilise to limit market failure arising in the distribution of income
Ensuring firms remain competitive, by limiting the abuse of market power
Providing a range of public goods hat can be used by all members of society
Increasing access to, and the quality of, education
Imposing taxes and bans on firms that contribute to negative externalities.
Which of the following best describes the concept of relative poverty?
Individuals not being able to afford necessities such as food, shelter and water
Individuals not being able to afford premium education
Individuals having lower standards of living compared to the average for the economy as a whole
Individuals in a certain country having substantially lower income levels and standards of living, compared to other countries
Which best describes how the Aust Government might achieve a more equitable distribution of income in the economy
Increasing GST
Increasing family benefit payments
Increasing university fees
Increasing interest rates
Which best describes the economic concept of free-riding?
Distributing the benefit of the good equally throughout society
Allowing all commuters to travel for free on public transport on the weekend
Requiring producers to pay for the externalities associated with the production process
Not being able to exclude someone who does not pay for the good, from enjoying its benefit
An economy is currently experiencing unsustainable high levels of economic growth. Which of the following best describes how a Govt might react
Increased taxation rates and lower interest rates
Increased taxation rates and higher interest rates
Decreased taxation rates and lower interest rates
Decreased taxation rates and higher interest rates
Which of the following best describes the likely effect of a tax on pollution from steel mills?
Decreased private costs of production, increased price of steel
Decreased private costs of production, decreased price of steel
Increased private costs of production, increased price of steel
Increased private costs of production, decreased price of steel
