The term market mechanism refers to:
Group of answer choices
Resource allocation based on consumer needs.
Resource allocation based on a production possibilities curve.
Government laws and regulations concerning how the market should operate.
The use of market prices and sales to signal desired output.
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Question 22 pts
2. Market failure implies that the market mechanism:
Group of answer choices
Causes shortages or surpluses in the market.
Leads the economy to a point outside the production possibilities curve.
Causes government failure.
Leads the economy to the wrong mix of output.
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Question 32 pts
3. Government intervention may be appropriate to correct market outcomes because of:
Group of answer choices
None of the above
Private Goods
Market Failure
Production Possibilities
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Question 42 pts
4. From an economic standpoint, government intervention is justified:
Group of answer choices
When the market mechanism fails to achieve the optimal mix of output.
When the private sector is larger than public sector.
Because the government will encourage the production of private goods.
Because the government can increase the level of market power of private businesses.
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Question 52 pts
5. Any imperfection in the market mechanism that prevents optimal outcomes is known as:
Group of answer choices
Market failure.
External cost.
Government failure.
Public cost.
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Question 62 pts
6. Which of the following is not a source of market failure?
Group of answer choices
Market power
Government intervention
Externalities
Public goods
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7. What is an externality?
Group of answer choices
The cost or benefit to a third party of a market activity
Anything external to the market
None of the above
The resulting resource allocation from a market activity
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Question 82 pts
8. In economics, a public good:
Group of answer choices
Is under produced by the market.
Is any good produced by the government.
Is over produced by the market.
Is provided in an optimal amount by the market.
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Question 92 pts
9. The term market power refers to:
Group of answer choices
A firms ability to make a profit.
A firm's ability to alter the market price or quantity of a good or service.
A firm's ability to fire employees.
The government's authority to tax businesses.
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Question 102 pts
10. The federal government's role in providing aid to the poor and the aged is justified because of concerns about:
Group of answer choices
Inequity
Market power
Restricted supply
Macro failure