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WorksheetsMarket Failures
Total questions: 12
Worksheet time: 8mins
Name
Class
Date
1.
Which best describes a public good?
a)
A good provided by the government
b)
A good purchased by individuals
c)
A good that exists only in a free market
d)
A good that produces no externalites
2.
A market failure is best described as
a)
The idea that market forces of supply and demand always provide the maximum benefit for society
b)
The idea that market forces of supply and demand do not always provide the maximum benefit for society
c)
The concept that a decision made by one party can have negative effects on another party
d)
The concept that a decision made by one party can have positive effects on another party
3.
The following statements are true of government regulations except
a)
They limit economic freedom
b)
They seek to limit negative externalities
c)
They exist to protect consumers
d)
They are always popular with private businesses
4.
Which is not an example of a government safety net?
a)
Unemployment Insurance
b)
Social Security
c)
Consumer Safety
d)
Medicaid
5.
Which is not an example of a public good?
a)
Legacy High School
b)
Big Dry Creek Open Space
c)
Target
d)
Broomfield Water
6.
Safety nets, in the context of market failure, are
a)
Goods that are not safe, equitable, and profitable in the market
b)
Designed to minimize external costs and shift the costs back to the producers
c)
Payments given by the government to private companies as an incentive for them to produce a certain good
d)
Programs that help people who are struggling
7.
Government regulations exist to
a)
Increase economic freedom
b)
Protect consumers from negative externalities
c)
Punish people who intervene in the free market
d)
Provide incentives to privatize
8.
Government regulation may negatively affect businesses in the following ways by
a)
Increasing input costs
b)
Increasing profits
c)
Lowering consumer prices
d)
All of the above
9.
Private businesses cannot always provide goods and services
a)
Profitably
b)
Fairly
c)
Safely
d)
All of the above
10.
The ups and downs of the economy, which the government must sometimes step in to stabilize due is known as the
a)
Regulatory cycle
b)
Business cycle
c)
Fiscal Policy
d)
Monetary Policy
11.
Which is not an example of a publicly owned industry intended to provide goods and services more efficiently to the public?
a)
Postal service
b)
Public transportation
c)
Airline industry
d)
Utilities such as gas, water, electric
12.
Market failures occur when
a)
the accumulation of wealth in the free market is shared between a large group of people
b)
a command economy increases production
c)
the economy has a strong GDP and low interest rates
d)
the distribution of goods and services in the free market is not efficient and leads to loss of social wellbeing
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