When the free market leads to a misallocation of resources in an economy it is...
Economics - Revision market mechanism and failure

Quiz
•
Other
•
11th - 12th Grade
•
Hard

Sabrina Schmidt
Used 105+ times
FREE Resource
12 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Market failure
public good
a positive externality
a negative externality
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Positive externalities are present if:
social costs exceed private costs
private benefits exceed private costs
production leads to private benefits
private benefits are less than social benefits
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A good which exhibits some, but not all, of the characteristics of a public good
non-excludable good
non-rival good
quasi-public good
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Partial market failure exists when:
a product is both non-excludable and non-rival
there is excess supply in a market at the current market price
a market exists but there is under-production
the market can only be competitive with government subsidies
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The rationing function of prices means that:
a rise in price will worsen any shortage of a product
changes in prices provide information to producers and consumers about changes in demand and supply
an increase in prices will encourage more firms to enter an industry
when there is a shortage of a product, prices will rise and put some consumers off buying the product
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A good is non-excludable if
its price is zero
it is not possible to prevent non-paying customers from enjoying it
it is supplied by the government rather than the free market
one person's use affects the quantity available for others
7.
MULTIPLE SELECT QUESTION
30 sec • 1 pt
The free market has no incentive to provide certain goods as people are awaiting others reactions/moves. This is:
the signalling function
the free-rider problem
the tragedy of the commons
imperfect information
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