IB Market Failure - revision

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.

• Common access resources

• Public goods

• Private goods

• Goods with negative externalities

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

Selling your old computer on Amazon could be an example of

• Public goods

• Asymmetric information

• Common access resources

• Negative externalities

A large number of cars polluting the air could be an example of

• Consumption of common access resources

• Asymmetric information

• Negative externalities

• Public goods

Which of the following diagrams best represents the market for vaccines?

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Which of the following diagrams best represents the market for sugary drinks?

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Market failure can be

• When the free market fails to provide at all

• When the free market provides too much

• When the free market provides too little

• When the free market clears at a high price

A merit good will require society to make a value judgement

• TRUE

• FALSE

The benefit to private businesses or individuals is shown in the curve..

• MPB

• MSC

• MSB

• MPC

Marginal Social Cost curve is

• upward sloping

• downward sloping