If buyers are rational and there is no market failure ?

Related Mcqs:

1. Which market is characterized by a small number of large buyers who control all purchases and therefore the market price of a good a service ?

   A. Oligopoly
   B. Grey market
   C. Oligopsony
   D. Green market

2. If a producer has market power (can influence the price of the product in the market) then free market solutions ?

   A. are equitable.
   B. are efficient
   C. maximize consumer surplus
   D. are inefficient

3. In general, if a benevolent social planner wanted to maximize the total benefits received by buyers and sellers in a market, the planner should?

   A. choose a price below the market equilibrium price
   B. allow the market to seek equilibrium on its own.
   C. Choose any price the planner wants because the losses to the sellers (buyers) from any change in price are exactly offset by the gains to the buyers (sellers).
   D. choose a price above the market equilibrium price

4. There is a decentralized market where geographically dispersed dealers are linked by telephones and computer screens. The market is for securities not listed on a stock or bond exchange. Name the market ?

   A. Grey market
   B. Over-the counter (OTC)
   C. Open market
   D. Back market

5. If all firms in a market have identical cost structures and if inputs used in the production of the good in that market are readily available, then the long-run market supply curve for that good should be ?

   A. downward sloping
   B. perfectly inelastic
   C. upward sloping
   D. perfectly elastic

6. Refer to Exhibit 4. If a tax is placed on the product in this market tax revenue paid by the buyers is the area ?

   A. B + C + E + F
   B. B
   C. B + C
   D. A

7. The burden of a tax falls more heavily on the buyers in a market when ?

   A. both supply and demand are inelastic
   B. demand is elastic, and supply are inelastic
   C. both supply and demand are elastic
   D. demand is inelastic, and supply is elastic

8. When a tax is collected from the buyers in a market, ?

   A. the tax burden falls most heavily on the buyers.
   B. the buyers bear the burden of the tax
   C. the sellers bear the burden of the tax
   D. the tax burden on the buyers and sellers in the same as an equivalent tax collected from the sellers

9. ________ consists of dividing a market into distinct groups of buyers on the basis of needs, characteristics or behavior who might require separate products or marketing mixes?

   A. Product differentiation
   B. Market segmentation
   C. Market targeting
   D. Market positioning

10. Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today ?

    A. The impact on both price and quantity is ambiguous
    B. Price will decrease, quantity is ambiguous.
    C. price will increase, quantity will decrease
    D. price will increase, quantity is ambiguous.
    E. Price will increase, quantity will increase