Question 1
What is meant by market failure?
A.
Worst risks most likely to buy insurance. B.
Behaviour changes when insured. C.
Wrong quantity produced/consumed. D.
One party knows more than the other.
Question 2
Information gaps can cause:
A.
Market failure B.
Only inflation C.
Only growth D.
Always efficiency
Question 3
What is meant by asymmetric information?
A.
Behaviour changes when insured. B.
Wrong quantity produced/consumed. C.
Seller often knows more than buyer — 'lemons' problem. D.
One party knows more than the other.
Question 4
What is meant by used car market?
A.
Wrong quantity produced/consumed. B.
Seller often knows more than buyer — 'lemons' problem. C.
Worst risks most likely to buy insurance. D.
Overconsumed due to information failure.
Question 5
Asymmetric information means:
A.
One party knows more B.
Perfect knowledge C.
No trade D.
Only government trades
Question 6
What is meant by symmetric information?
A.
Regulation and information campaigns. B.
Incomplete knowledge causing poor decisions. C.
Behaviour changes when insured. D.
Buyers and sellers have same knowledge.
Question 7
What is meant by moral hazard?
A.
Behaviour changes when insured. B.
Worst risks most likely to buy insurance. C.
Underconsumed due to information failure. D.
Seller often knows more than buyer — 'lemons' problem.
Question 8
What is meant by merit goods?
A.
Underconsumed due to information failure. B.
Buyers and sellers have same knowledge. C.
Incomplete knowledge causing poor decisions. D.
One party knows more than the other.
Question 9
What is meant by demerit goods?
A.
Overconsumed due to information failure. B.
Worst risks most likely to buy insurance. C.
One party knows more than the other. D.
Behaviour changes when insured.
Question 10
What is meant by consumer protection?
A.
Incomplete knowledge causing poor decisions. B.
Regulation and information campaigns. C.
Behaviour changes when insured. D.
Worst risks most likely to buy insurance.
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