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WorksheetsEconomics / Market Failure
Total questions: 15
Worksheet time: 5mins
________is where the market mechanism fails to allocate resources efficiently.
Market structure
Market Failure
Economic System
Demand and Supply
A large number of cars polluting the air could be an example of
Consumption of common access resources
Asymmetric information
Negative externalities
Public goods
This means that consumption by one person does not reduce the consumption by another persons.
Non-Rivalrous
External cost
Non-excludable
Freeriders
More harmful than customers realize examples are tobacco, alcohol and harmful substances.
Merit goods
Demerit goods
Private goods
Economic goods
Could be provided by the market but consumers may not be able to afford or feel the need to purchase them
Merit goods
Demerit goods
Public goods
Supply
The following are causes of Market failure except one
Imperfect Knowledge
Market power
Externalities
Efficiency
Which of the following is NOT a Market Structure?
Perfect Competition
Oligopoly
Monopoly
Corporation
Companies that possess market power are referred to as ____________.
competitive firms
identical firms
price takers
price makers
Barriers of entry will make market ________ efficient and ______ productive.
less; less
less; more;
more; less
more; more
When firms agree to charge the same or similar prices for a product, this is known as
price-fixing
independent behavior
natural monopoly
laissez-faire
Negative externalities can be best described as
When the consumption/production of a good or service has a negative impact on a third party
When the consumption/production of a good or service has any impact on a third party
When the consumption/production of a good or service has a positive impact on a third party
When the consumption/production of a good or service depletes the access for a third party
TWO ANSWERS ARE CORRECT: Market failure occurs:
The free market fails to open on time
Free markets fail efficiently allocate resources
Price mechanism is NOT low enough for all consumers to afford the good
Price mechanism fails to account for all costs and benefits associated with consumption of a product
Price of goods in competitive market is determined by _____________.
demand and supply
the firm itself
government
overseas firms
