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WorksheetsMarket Failure & Govt intervention
Total questions: 10
Worksheet time: 5mins
Efficiency in markets occurs when the social optimum is achieved, where MPB = MPC, maximising society's welfare
True
False
Efficient allocation may
not result in equitable outcomes. An efficient allocation may not be a (a) (4 letters) allocation
Which of the following statement is correct?
Public Transport is a public good
Related sources of market failure for merit goods are positive externalities and inequity
Occupational immobility of labour is a source of market failure
Public goods are goods that are rivarlrous and excludable in consumption
Select answers that apply: Why do govt intervene in the context of university education?
It is a Public good
Positive Externalities
Imperfect Information
Inequity
Illustrate how existence of positive externality in consumption of a good results in market failure.
Complete the diagram to show how subsidy to producers would help to underconsumption of university education.
What one is a correct explanation for underconsumption of university education due to imperfect information?
MPBperceived > MPBactual
MPBperceived < MPBactual
MSBperceived > MSBactual
MSBperceived < MSBactual
Which of the following is not applicable to the context of used car market?
Moral Hazard
Asymmetric Information
Adverse selection
Information failure
Which of the following measure is considered as signalling to counter asymmetric information?
Lemon Law
Universal Coverage
Online Reviews
Warranty of a product
I am ___% familiar with this topic on market failure now. (no mark for this question. Be truthful!)
0-25
26-50
51-75
76-100
