Top 80+ Solved MicroEconomics, Theory and Applications 2 MCQ Questions Answer
Q. A pure private good is
a. nonrival in consumption and subject to exclusion.
b. rival in consumption and subject to exclusion.
c. rival in consumption and not subject to exclusion.
d. all of the above
Q. The M RTS L,K between any two inputs be equal in the production of all commodities.3. The MRPTx,y be equal to the MRSx,y for any two goods.
a. condition 1&2 are satisfied
b. condition 1 &3 are satisfied
c. condition 2 &3 are satisfied
d. condition 1, 2 &3 are satisfied
Q. Points outside the production possibility frontier are
a. producable.
b. endowment points.
c. consumer equilibrium points.
d. unattainable.
Q. Positive economics
a. does not depend on market interactions.
b. only looks at the best parts of the economy.
c. examines how the economy actually works (as opposed to how it should work).
d. is very subjective.
Q. The Coase theorem has problems because
a. generally, bargaining costs are not zero.
b. individuals are not concerned with others.
c. markets always exist.
d. all of the above.
Q. The marginal rate of substitution is
a. the slope of the pareto curve.
b. the slope of the contract curve.
c. the slope of the utility possibilities curve.
d. the slope of the indifference curve.
Q. The slope of the production possibilities curve is the
a. marginal rate of substitution.
b. contract curve.
c. marginal rate of transformation.
d. offer curve.
Q. The First Fundamental Theorem of Welfare Economics requires
a. producers and consumers to be price takers.
b. that there be an efficient market for every commodity.
c. that the economy operate at some point on the utility possibility curve.
d. all of the above.
Q. Market failure can occur when
a. monopoly power exists in the market.
b. markets are missing.
c. consumers can influence prices.
d. all of the above.
Q. A public good is
a. a good that the public must pay for.
b. nonrival in consumption.
c. more costly than a private good.
d. paid for by the government.
Q. Movement from an inefficient allocation to an efficient allocation in the Edgeworth Box will
a. increase the utility of all individuals.
b. increase the utility of at least one individual, but may decrease the level of utility of another person.
c. increase the utility of one individual, but cannot decrease the utility of any individual.
d. decrease the utility of all individuals.
Q. Points on the utility possibility frontier are
a. inefficient.
b. points of incomplete preferences.
c. not producible.
d. pareto efficient.
Q. Market mechanisms are unlikely to provide
a. prices.
b. nonrival goods efficiently.
c. supply and demand.
d. none of the above.
Q. Public goods can be
a. provided privately.
b. provided publicly.
c. subject to free rider problems.
d. all of the above.
Q. Externalities can be positive because
a. marginal damages do not last over time.
b. utility can be impacted positively as well as negatively.
c. there is no concept for marginal benefit.
d. positive externalities are subsidies.