Lesson 3.4.1
3.4.1 Efficiency Quiz: Pearson Edexcel Economics, Unit 3
20 questions
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Lesson 3.4.1, Efficiency: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 3: Theme 3: Business behaviour and the labour market, written with Revision Ninja.
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The 20 questions
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Which mathematical condition must be met for a market to achieve allocative efficiency?
- MR equals MC
- Price equals MC
- Price equals AC
- MC equals AC
-
At what output level is productive efficiency achieved?
- Minimum average cost
- Maximum total revenue
- Price equals MC
- MR equals MC
-
Which type of efficiency occurs over time through technological progress and innovation?
- Static efficiency
- Allocative efficiency
- Productive efficiency
- Dynamic efficiency
-
Which type of inefficiency occurs when a lack of competition leads to organisational slack?
- Dynamic inefficiency
- X-inefficiency
- Productive inefficiency
- Allocative inefficiency
-
Which efficiencies are both achieved by a perfectly competitive firm in the long run?
- Productive and dynamic
- Dynamic and allocative
- Productive and allocative
- Dynamic and X-efficiency
-
Which condition describes allocative inefficiency in a monopoly market?
- Price exceeds MC
- MC exceeds MR
- Price equals ATC
- Price equals MC
-
Which market structure is most likely to achieve dynamic efficiency using long-run supernormal profits?
- Perfect competition
- Contestable market
- Monopolistic competition
- Oligopoly
-
A firm sets its price at £12 and marginal cost at £9. What does this indicate?
- Dynamic efficiency
- Allocative efficiency
- Productive efficiency
- Allocative inefficiency
-
What is a primary cause of X-inefficiency within a firm?
- Price matching
- Decreasing marginal cost
- Excessive competition
- Lack of competition
-
A firm invests profits into research to reduce production costs in future years. Which efficiency is achieved?
- Dynamic efficiency
- Static efficiency
- Productive efficiency
- Allocative efficiency
-
What is created when a monopolist sets price above marginal cost, causing market misallocation?
- Dynamic efficiency
- Deadweight loss
- Normal profit
- Supernormal profit
-
Why do perfectly competitive firms achieve productive efficiency in the long run?
- Intense market competition
- Government cost subsidies
- Supernormal profit retention
- High entry barriers
-
What does operating at an output level above minimum average total cost indicate?
- Dynamic efficiency
- Productive inefficiency
- Allocative efficiency
- Productive efficiency
-
What factor determines whether an oligopoly achieves competitive market outcomes?
- Government ownership
- Number of consumers
- Product homogeneity
- Collusion versus rivalry
-
Which policy objective can conflict directly with market efficiency during government intervention?
- Social equity
- Cost reduction
- Profit maximisation
- Market dominance
-
A monopolist has MC = 5, demand P = 20 - 0.5Q and MR = 20 - Q. What is the allocatively efficient output?
- Q = 30
- Q = 15
- Q = 12.5
- Q = 20
-
If a monopolist sets price at £12.50 and marginal cost is £5.00, what is the mark-up per unit?
- £7.50
- £5.00
- £17.50
- £12.50
-
What type of efficiency occurs when supernormal profits are reinvested into innovation over time?
- Allocative efficiency
- X-inefficiency
- Dynamic efficiency
- Productive efficiency
-
Which type of efficiency is achieved when price equals marginal cost?
- Dynamic efficiency
- X-efficiency
- Productive efficiency
- Allocative efficiency
-
Why do perfectly competitive firms struggle to achieve dynamic efficiency in the long run?
- Product differentiation
- No supernormal profit
- Monopoly power
- High entry barriers
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