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

Apartment dwellers who buy fire alarms or fire extinguishers generate a

• negative externality.

• positive externality.

What is the free rider problem?

• scarcity even when you pay for a good

• Reaping all the benefits without contributing

• Common goods that don't have a price

• HyDEEE never pays for gas

Which of the following is an example of a positive externality resulting from an outdoor band concert?

• An elderly woman in her apartment hears a song that she liked as a child.

• A pair of endangered birds leave their nest in a nearby tree when the concert starts.

• A pizza parlor closes early, because all of its customers are at the concert.

• A traffic jam occurs as drivers hunt for parking spots near the concert.

An Economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume.

• Public good

• Free rider

• Externalities

• Private sector

Public goods are

• rival and excludable

• non-rival and non-excludable

• rival and non-excludable

• non-rival and excludable

Excludable means:

• Someone can deny access to a good

• Everyone is able to access a good

• Multiple people can use something at the same time

• Only one person can use something at one time

Tragedy of the _____ is the idea that common goods that everyone has access to are often misused and exploited.

• Commons

• Exceptions

• People

• Oligarchs

If a student volunteers at a food pantry on Fridays after school, which of the following might be a negative externality?

• The student might learn a new skill.

• The student might make some new friends.

• The student's parents have to drive him or her to the food pantry.

• The student might decide to volunteer two days a week.

Which of the following is NOT an example of a public good?

• Fireworks display

• National Defense

• Public transportation

• Lighthouse