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Market failure and government intervention quiz (Singapore O-Level Economics 2286) quiz

14questions. Pick an answer and you'll see why right away.

  1. What is market failure?

  2. A factory's pollution harms nearby residents who are not part of the transaction. This is an example of:

  3. Why does a free market tend to OVER-produce a good with a negative externality?

  4. Education is often called a merit good because:

  5. Cigarettes are a demerit good because:

  6. What are the two defining features of a public good?

  7. Why will a free market provide NONE of a public good such as street lighting?

  8. A maximum price (price ceiling) set BELOW the equilibrium will cause:

  9. A minimum price (price floor) set ABOVE the equilibrium, such as a minimum wage, tends to cause:

  10. Which government tool is best suited to correcting a good with an external COST?

  11. Which tool is best suited to encouraging a good with an external BENEFIT, such as vaccination?

  12. Why might government intervention itself fail to improve the outcome (government failure)?

  13. An indirect tax on a good with INELASTIC demand will reduce the quantity sold:

  14. Direct government provision is most appropriate for which type of good?