Market failure
Quiz
•
Social Studies
•
11th Grade
•
Medium
Shaun Hayes
Used 1+ times
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70 questions
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1.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
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
2.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
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
3.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
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
4.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
When social costs are greater than private costs, there is a;
positive externality
negative externality
less than socially optimal output
socially optimal output
5.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Public goods, such as defence, are not supplied by the price system because;
the capital cost is too high
the benefits would - ceteris paribus - not be restricted to buyers but would be available to non-buyers as well
public goods are necessities and therefore cannot be left to the price system
monopolies would make supernormal profits
6.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Which of the following is a characteristic of a merit good?
It could be provided by the free market, but not in sufficient quantities
It is always provided free to consumers
It tends to generate negative externalities, so governments restrict its consumption
Once the good has been supplied to one consumer, there is no additional cost in supplying it to others
7.
MULTIPLE CHOICE QUESTION
2 mins • 1 pt
Which of the following does not apply to merit goods and services?
They provide private and social benefits
They are limited in supply and require a system of allocation
They could be paid for by the consumer if a market system was allowed to operate
They have the characteristic of non-excludability
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