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Market Failure
Market Failure
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An #economics #quiz to #recap the #basics of #market #failure (#Edexcel)
Flashcards
18 cards
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Questions
18
Answers
1
The following diagram can be used to represent
A merit good
Both of the above
A negative consumption externality
A demerit good
2
A negative production externality exists when
Social benefits > Private benefits
Social costs < Private costs
Social costs > Private costs
Social benefits < Private benefits
3
What type of market failure is exhibited in the image?
Positive Externality of Consumption
Negative Externality of Production
Positive Externality of Production
Negative Externality of Consumption
4
Any situation where the allocation of resources by a free market is not efficient is known as..
Transactional Loss
Asymmetric Information
Market Failure
Allocative Efficiency
5
a good for which the marginal social benefit exceeds the marginal social costs
demerit good
merit good
normal good
substitute good
6
All the utility derived from the use of a good, including those of the consumer and society.
Marginal Social Cost
Marginal Private Cost
Marginal Social Benefit
Marginal Private Benefit
7
Which of the following is
NOT
a condition for a public good?
Deemed a necessity by Government
Non-rivalrous in Consumption
Generally Provided by Government
Non-excludable by the provider
8
This diagram represents what type of market failure?
Positive Externality of Consumption
Negative Externality of Consumption
Positive Externality of Production
Negative Externality of Production
9
The image best illustrated which type of market failure?
Positive Externality of Consumption
Negative Externality of Production
Negative Externality of Consumption
Positive Externality of Production
10
Which of the following is not a type of market failure?
Lack of Public Goods
Negative Externalities
Factor Immobility
Amount of Unused Capacity
11
A positive externality is when there are spillover _____________________.
Costs
Benefits
12
Which of the following is a possible government correction for the market failure in the graph?
Tradable Permits
Corrective Subsidy
Corrective Tax
Regulation
13
A negative externality of consumption is when a good is ...
Under-Produced
Over-Consumed
Over-Produced
Under-Consumed
14
Individuals who enjoy a good's benefits without paying for it are known as ...
Free-riders
Rational Consumers
Users of the Commons
Power Users
15
The costs of a good suffered solely by the producer.
Marginal Social Benefit
Marginal Private Benefit
Marginal Private Costs
Marginal Social Costs
16
The following are all examples of public goods
EXCEPT
...
Interstate Highways
Streetlights
Concert Tickets
Fire Departments
17
In the image, a subsidy is being applied to what type of market failure?
Negative Externality of Production
Positive Externality of Production
Positive Externality of Consumption
Negative Externality of Consumption
18
When an externality of consumption exists, it means the demand curve has ...
Shifted
Altered
Split
Moved
