Economic Systems and Market Structures CDS Questions

CDS Economy

Economic Systems and Market Structures MCQ Questions


1.
What is the primary advantage of a market economy?
A.
Equal income distribution
B.
Efficient resource allocation
C.
Centralized decision-making
D.
Government control over production
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ANSWER :
B. Efficient resource allocation
2.
Which of the following market structures is known for price rigidity?
A.
Monopoly
B.
Oligopoly
C.
Perfect competition
D.
Monopolistic competition
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ANSWER :
B. Oligopoly
3.
Which economic system relies heavily on government intervention?
A.
Capitalism
B.
Market economy
C.
Command economy
D.
Traditional economy
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ANSWER :
C. Command economy
4.
What is the defining feature of a duopoly?
A.
Single seller
B.
Two sellers dominate the market
C.
Many small sellers
D.
Differentiated products
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ANSWER :
B. Two sellers dominate the market
5.
In which market structure do firms have some control over pricing due to product differentiation?
A.
Perfect competition
B.
Monopoly
C.
Oligopoly
D.
Monopolistic competition
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ANSWER :
D. Monopolistic competition
6.
What is the role of profits in a market economy?
A.
Reduce competition
B.
Encourage innovation and efficiency
C.
Promote government intervention
D.
Ensure equality among producers
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ANSWER :
B. Encourage innovation and efficiency