New quiz

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 public good?

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

Government regulations exist to

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

Market failures occur when

• the accumulation of wealth in the free market is shared between a large group of people

• a command economy increases production

• the economy has a strong GDP and low interest rates

• the distribution of goods and services in the free market is not efficient and leads to loss of social wellbeing

In which of the following situations is market failure least likely to occur? A situation where;

• externalities exist

• many producers compete in the market

• there is a sole producer in market

• there is a very uneven distribution of income and wealth

Which of the following statements is true about externalities?

• When externalities exist, resources are allocated efficiently

• When positive externalities exist, efficiency is improved by taxing the product

• From society's point of view, the output of goods for which a positive externality exists is too low

• The price system overproduces goods with positive externalities

A situation of market failure is said to exist if;

• buyers and sellers pay for the true opportunity costs of their actions

• there are no externalities

• the government provides merit goods free

• third parties in society are affected and not compensated

When social costs are greater than private costs, there is a;

• positive externality

• negative externality

• less than socially optimal output

• socially optimal output