Market Failures

Which best describes a public good?

• A good provided by the government 
• A good purchased by individuals
• A good that exists only in a free market
• A good that produces no externalites

A market failure is best described as

• The idea that market forces of supply and demand always provide the maximum benefit for society
• The idea that market forces of supply and demand do not always provide the maximum benefit for society
• The concept that a decision made by one party can have negative effects on another party
• The concept that a decision made by one party can have positive effects on another party

The following statements are true of government regulations except

• They limit economic freedom
• They seek to limit negative externalities
• They exist to protect consumers
• They are always popular with private businesses

Which is not an example of a government safety net?

• Unemployment Insurance
• Social Security
• Consumer Safety 
• Medicaid

Which is not an example of a public good?

• Legacy High School
• Big Dry Creek Open Space
• Target
• Broomfield Water

Safety nets, in the context of market failure, are 

• Goods that are not safe, equitable, and profitable in the market 
• Designed to minimize external costs and shift the costs back to the producers
• Payments given by the government to private companies as an incentive for them to produce a certain good
• Programs that help people who are struggling

Government regulations exist to

• Increase economic freedom
• Protect consumers from negative externalities
• Punish people who intervene in the free market
• Provide incentives to privatize

Government regulation may negatively affect businesses in the following ways by

• Increasing input costs
• Increasing profits
• Lowering consumer prices
• All of the above

Private businesses cannot always provide goods and services

• Profitably
• Fairly
• Safely
• All of the above

The ups and downs of the economy, which the government must sometimes step in to stabilize due is known as the

• Regulatory cycle

• Business cycle

• Fiscal Policy

• Monetary Policy