Which of the following is NOT a type of market failure? MCQ with Answer and Explanation

Which of the following is NOT a type of market failure?
A. Public goods
B. Asymmetric information
C. Perfect competition
D. Externalities
Answer: Option C
Solution (By JKSSB Mock Tests)
Market failure occurs when free markets fail to allocate resources efficiently. Causes include externalities, public goods, asymmetric information and monopoly power. Perfect competition is an ideal, not a failure.

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Practice More Economy Set 1 Questions

Question #1
The term 'Special Drawing Rights' can be used by member countries of the IMF for:
A. Only financing fiscal deficit
B. Only purchasing gold
C. Settling international payments and as a reserve asset
D. Only domestic transactions

Correct Answer: Option C


Explanation:
SDRs are international reserve assets that can be exchanged for freely usable currencies and used in transactions among IMF members and prescribed holders.

This question belongs to: Economy GK Economy Set 1
Question #2
Disinvestment refers to:
A. foreign investment in defence
B. borrowing from the IMF
C. sale of government equity in public sector enterprises
D. purchase of private sector equity by the government

Correct Answer: Option C


Explanation:
Disinvestment is the sale of government equity in public sector enterprises.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of public expenditure, 'Capital Expenditure' is characterised by:
A. No creation of assets
B. Creation of assets or reduction of liabilities
C. Only payment of salaries
D. Only payment of interest

Correct Answer: Option B


Explanation:
Capital expenditure leads to the creation of assets (such as infrastructure) or reduction of liabilities (such as repayment of loans).

This question belongs to: Economy GK Economy Set 1