market failure

What is an externality in the context of market failure?

• A product that can be excluded from non-payers

• A cost or benefit incurred by a third party who did not agree to it

• The exclusive right to produce a particular good

• 
  A situation where market supply and demand balance perfectly

Which of the following is an example of a negative externality?

• A public park

• A free online educational course

• 
  A factory polluting a river that is used by the community

• A patented invention

What characterises a Public good?

• 
  It is non-excludable and non-rivalrous

• 
  It is excludable and rivalrous

• 
  It is only available to paying customers

• 
  

  It can be easily depleted

Which of the following is an example of a public good?

• 
  A private swimming pool

• 
  

  A toll road

• 
  National defence

• 
  

  A restaurant meal

What does market power refer to?

• 
  The ability of consumers to dictate prices

• 
  The power of the government to regulate markets

• 
  The ability of a firm to influence or control the price and output of a product

• The collective power of buyers and sellers to reach equilibrium

Monopolies are an example of:

• 
  Perfect competition

• 
  

  Market power

• 
  Public goods

• 
  

  Externalities

What is information asymmetry?

• 
  When all market participants have the same information

• 
  When one party in a transaction has more or better information than the other

• 
  The equal distribution of income among participants

• 
  The symmetry in product information available to all consumers

Which of the following is a solution to reduce negative externalities?

• 
  Decreasing taxes on the affected goods

• 
  

  Increasing public awareness

• 
  Imposing a tax on the producer of the externality

• Encouraging monopolies

Government intervention in the market is usually required when:

• 
  Markets are perfectly competitive

• There is a presence of market failures

• 
  All products are private goods

• 
  

  Information symmetry exists

Regulation can be defined as:

• 
  The absence of government in the marketplace

• The actions taken by a government to influence or control market activities

• 
  The process of deregulating markets

• 
  The market self-regulating without any external influence