Government Policies to Achieve Efficient Resource Allocation and Correct Market Failure Quiz by Shubhrata Shrestha | Jun 30, 2025 | 0 comments Government Policies to Achieve Efficient Resource Allocation and Correct Market Failure Quiz 1. What type of tax is a fixed amount charged per unit of a good? A) Ad valorem tax B) Specific tax C) Value-added tax D) Corporation tax None 2. Which of the following is a possible disadvantage of subsidies? A) Reduces merit goods B) Encourages overproduction ✅ C) Improves allocative efficiency D) Reduces external benefits None 3. Pollution permits are an example of: A) Deregulation B) Price control C) Market-based environmental policy D) Public good provision None 4. Which term refers to a situation where government intervention leads to worse outcomes than the market? A) Market correction B) X-inefficiency C) Market failure D) Government failure None 5. Which of the following is a characteristic of public goods? A) Non-rival and non-excludable B) High price elasticity C) Finite availability D) Must be licensed to consume None 6. Price ceilings typically lead to: A) Overproduction B) Shortages C) Efficiency D) Rising demand None 7. Behavioural insights are used by governments to: A) Influence choices without removing freedom B) Ban all harmful products C) Replace subsidies D) Increase inflation None 8. Which policy assigns legal ownership to internalise externalities? A) Direct provision B) Pollution tax C) Property rights D) Licensing None 9. What is a key feature of nationalisation? A) Privatizing government services B) Government ownership of industries C) Deregulated supply chains D) Free market pricing None 10. Which cause of government failure involves regulators serving private interests? A) Regulatory capture B) Merit goods C) Adverse selection D) Deadweight losS None Time's up Submit a Comment Cancel replyYour email address will not be published.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
