...7...objective.

Question 1 If the price in a market is fixed by the government below equilibrium: a) There is excess equilibrium b) There is excess supply c) There is excess demand d) There is equilibrium Question 2 If the price in a market is fixed by the government above equilibrium: a) There is excess equilibrium b) There is excess supply c) There is excess demand d) There is equilibrium Question 3 Merit goods are: a) Not provided in the free market economy b) Under provided in the free market economy c) Over provided in the free market economy d) Provided free Question 4 Agricultural prices tend to be unstable because: a) Supply is price elastic b) Demand is price elastic c) Supply is stable d) Demand and supply are price inelastic Question 5 When supply increases in an agricultural market farmer's earnings might fall because: a) Supply is price elastic b) Demand is price inelastic c) The government buys up all the excess production d) All output must be sold at a maximum price Question 6 Which of the following is the government most likely to subsidize? a) Negative externalities b) Positive externalities c) Monopolies d) Oligopolies Question 7 With a positive externality: a) There is under-consumption in the free market b) There is over consumption in the free market c) The government may tax to decreaseproduction d) Society could be made off if less was produced Question 8 A public good: a) Is provided by the government b) Is free c) Has the properties of being non-excludable and non-diminishable d) Has external costs Question 9 Nationalization occurs when: a) The government sells assets to a the private sector b) The government bans a product c) The government takes ownership of a business d) The government taxes a product to araise its price Question 10 If a maximum price is set above equilibrium there will be: a) A price fall b) A price increase c) Excess supply d) Excess demand