Free Printable Market Failures & Role of Government

Worksheets

Market Failures & Role of Government

Total questions: 17

Worksheet time: 12mins

Name

Class

Date

A beekeeper who produces honey helps the apple orchard next door because the extra bees help pollinate the apple trees. This an example of

a. Positive Externalities

b. Negative Externalities

c. Vertical merging

d. Collusion

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

a. Side effects

b. Public Goods

c. Externalities

d. Monopolies

A market failure is best described as

a. The concept that a decision made by one party can have negative effects on another

b. The idea that market forces of supply and demand always provide the maximum benefit for society

c. The concept that a decision made by one party can have positive effects on another

d. The idea that market forces of supply and demand do not always provide maximum benefit for society

A situation in which the market, on its own, doesn’t distribute resources effectively. Underproduction or overproduction of goods when producers or consumers do not have to bear the whole cost of their transactions. Sometimes when it’s hard to figure out who should pay.

Monopoly

Public Good

Market Failure

A shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exclude nonpayers. Examples: Roads, mail, military.

Public Good

Monopoly

Market Failure

Laws that encourage competition in the marketplace. They are needed because if they aren’t in place oligopolies and monopolies can form, which decrease output and increase prices to make a larger profit.

Anti monopoly laws

Anti trust laws

Anti business laws

Anti Government laws

Which two government agencies can block mergers (when two companies combine into one) and ensure fair competition in the market.

Judicial Branch and Department of Homeland Security

Federal Trade commission and Department of Justice

Department of Trade and Department of Agricultural

When the government loosens the reins a little bit and no longer decides what role/how much of a role a company can have in a market and how much the company can charge its customers. They let the market and competition determine prices, etc.

Re-regulation

Un-regulation

Deregulation

Laws that require companies to provide full information about their products. They ensure that consumers have all the information they need to make sure a smart purchase.

Workplace Safety Laws

FDA

FTC

Public Disclosure Laws

10.

Sets regulations on workplace safety, conducts workplace inspections, and requires public disclosure of hazards to workers of different jobs like pesticides or asbestos.

Occupational Safety and Health Administration

Workplace Safety Company

Department of Homeland Security

11.

Created in 1906. It sets and enforces standards for food, drugs, and cosmetic products in order to protect consumers.

Consumer Product Safety Commission (CPSC)

Food and Drug Administration (FDA)

EPA

12.

Getting a flu shot is an example of a ________ externality

Negative

Neutral

Positive

13.

By-products of production or consumption that impose costs on third parties are known as

negative externalities

rival externalities

positive externalities

exclusive externalities

14.

Goods that are provided by the government (and paid for through taxation) are known as:

Private goods

Public Goods

Cartels

Commodities

15.

This is an illegal act in which companies agree to set the price of their good or service the same.

Commodity

Commercializatio

Barrier to entry

Collusion

16.

An essential characteristic of a public good is that it is non-excludable. This means that

public goods are of equal benefit to all consumers.

there is no opportunity cost in the provision of public goods.

people could consume the good without paying for it.

the government should not levy a tax for providing public goods.

17.

Which one of the following is the reason why public goods are supplied by the government?

Sellers of the good or service are unable to prevent consumers from enjoying its benefits without payment.

Producers demand a higher price than some members of the public are prepared to pay.

Only governments have the technical knowledge required to produce public goods and services.

They can only be produced by a monopoly firm to prevent competition from rival suppliers.

Reset

Market Failures & Role of Government

Total questions: 17

Worksheet time: 12mins

Similar Resources on Wayground