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WorksheetsGOVT INTERVENTATION
Total questions: 32
Worksheet time: 16mins
What is the primary method of government intervention to minimize market power?
Taxation
Direct Control
Legislation and Regulations
Subsidies
Which of the following is a price-based regulation?
Setting Maximum Prices
Promoting Competition
Prohibiting Monopolies
Ensuring Proper Use of Intellectual Property Rights
What is the purpose of competition-based regulations?
To ensure fair trade
To promote competition
To increase monopolies
To set maximum prices
Which law is an example of competition law in India?
Consumer Protection Act
Companies Act
Patents Law
Trade Marks Act
What do subsidies aim to promote?
Positive Externalities
Market Monopolies
Price Controls
Negative Externalities
What is a direct control measure for negative externalities?
Setting Limits for Emissions
Pollution Tax
Tradeable Emissions Permits
Subsidies for Clean Energy
Which of the following is an example of a negative externality?
Public Parks
Healthcare
Pollution
Education
What is the concept behind the Pigouvian Tax?
Tax on output
Tax on sales
Tax on externalities
Tax on profits
What is a characteristic of merit goods?
Only provided by private firms
Socially desirable
Involves high negative externalities
Socially undesirable
Which of the following is NOT a form of government intervention in merit goods?
Subsidies
Direct Government Provision
Market Regulation
Taxation
What is the main goal of government intervention in demerit goods?
To enhance production
To promote competition
To reduce consumption
To increase consumption
Which of the following is an example of a demerit good?
Healthcare
Education
Tobacco
Public Parks
What is the effect of setting maximum prices on essential drugs?
Reduces competition
Increases supply
Promotes monopolies
Decreases supply
What is the purpose of tradeable emissions permits?
To allow firms to pollute freely
To convert social costs into private costs
To increase pollution
To eliminate all emissions
Which of the following is a method to correct negative externalities?
Market Expansion
Direct Controls
Price Caps
Subsidies
What is a potential drawback of pollution taxes?
Increases production costs
Encourages pollution
Reduces consumer welfare
All of the above
What is the role of the Pollution Control Board in India?
To regulate emissions
To promote monopolies
To provide subsidies
To set prices for goods
Which of the following is a characteristic of indirect controls over negative externalities?
Subsidies
Direct government production
Setting limits
Total prohibition
What is the main reason for government intervention in merit goods?
To maximize private profits
To reduce competition
To ensure equitable access
To promote monopolies
What is a common example of a positive externality?
Education
Pollution
Alcohol
Tobacco
Which of the following is a method to enhance the consumption of merit goods?
Reducing subsidies
Direct government provision
Increasing prices
Limiting access
What is the effect of imperfect information on merit goods?
Promotes competition
Ensures optimal pricing
Decreases consumption
Increases consumption
What is the purpose of regulations in the context of merit goods?
To promote monopolies
To increase prices
To enhance consumption
To limit production
Which of the following is a characteristic of demerit goods?
Involves positive externalities
Socially desirable
Promotes public welfare
Socially undesirable
What is the impact of government subsidies on production costs?
Increase costs
Decrease costs
No impact
Only affect demand
What is the main goal of setting limits for negative externalities?
To enhance competition
To increase production
To reduce social costs
To promote monopolies
Which of the following is a method to correct positive externalities?
Prohibitions
Taxation
Subsidies
Regulations
What is the effect of government intervention on consumer welfare in the case of demerit goods?
Increases welfare
Decreases welfare
No effect
Only affects producers
What is the main challenge in administering a pollution tax system?
Easy to monitor
Difficult to set the right tax level
Promotes competition
Increases production
What is a common reason for the government to provide merit goods?
To increase inequality
To ensure public welfare
To promote private profits
To limit access to services
Which of the following is a consequence of under-provision of merit goods?
Negative impact on public health
Higher levels of consumption
Enhanced economic growth
Increased social welfare
What is the effect of government subsidies on merit goods?
They limit production
They increase accessibility
They decrease demand
They promote monopolies
