Methods and Effects of Government Intervention in Markets Quiz by Shubhrata Shrestha | May 24, 2025 | 0 comments Methods and Effects of Government Intervention in Markets Quiz 1. What effect does a subsidy have on the market supply curve? A. Shifts it to the left B. Makes it steeper C. Shifts it to the right D. Eliminates it completely None 2. Which goods typically require direct government provision due to the free-rider problem? A. Inferior goods B. Complementary goods C. Public goods D. Substitute goods None 3. What is the likely outcome of a maximum price set below equilibrium? A. Surplus B. Black market C. Decrease in demand D. Increase in supply None 4. In the case of inelastic demand, who bears most of an indirect tax? A. Government B. Producers C. Retailers D. Consumers None 5. Which of the following is NOT a reason for offering subsidies? A. To encourage merit good consumption B. To increase producer revenue C. To raise government revenue D. To support exports None 6. What happens when a price floor is set above the market equilibrium? A. A shortage occurs B. Demand increases C. A surplus occurs D. Prices fall None 7. Ad valorem taxes differ from specific taxes because they are based on: A. Quantity of units sold B. Level of income C. The percentage of product value D. Fixed government targets None 8. Which of the following is a drawback of buffer stock schemes? A. Reduced consumer access B. Discourages exports C. High maintenance costs D. Encourages imports None 9. Providing health warnings on cigarette packages is an example of: A. Direct provision B. Information provision C. Price ceiling D. Indirect tax None 10. Which elasticity scenario leads to producers bearing most of an indirect tax burden? A. Perfectly inelastic demand B. Inelastic supply C. Elastic demand D. Perfect competition None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ
