Types of Goods and Market Failures Quiz
Explore market failures, public goods, externalities, and more in this quiz on types of goods and market failures.
#1
What is an example of a positive externality?
Pollution
Education benefits from an educated population
Traffic congestion
Overfishing
#2
Which of the following is an example of a private good?
Clean air
National defense
A hamburger from a fast-food restaurant
Street lighting
#3
Which of the following is an example of a common resource?
Fish in the open ocean
Private health insurance
Fireworks on Independence Day
Private education services
#4
Which of the following is an example of a non-excludable good?
Private tutoring services
A public library
A private swimming pool
A subscription-based streaming service
#5
What is a public good?
A good that is only available to a specific group of people
A good that is rivalrous and excludable
A good that is non-rivalrous and non-excludable
A good that is non-rivalrous but excludable
#6
Which type of market failure occurs when there is an overproduction of negative externalities?
Monopoly
Tragedy of the Commons
Public goods problem
Externalities problem
#7
What is the tragedy of the commons?
A situation where individuals or firms underproduce a good
A situation where a common resource is overused and depleted
A situation where there is perfect competition in the market
A situation where there is a shortage of public goods
#8
What is the difference between a normal good and an inferior good?
Normal goods are always of higher quality than inferior goods
Normal goods are always more expensive than inferior goods
Normal goods have a positive income elasticity of demand, while inferior goods have a negative elasticity
Normal goods are always necessities, while inferior goods are always luxuries
#9
What is the free rider problem in the context of public goods?
A situation where individuals consume a good without paying for it, leading to underproduction
A situation where there is perfect competition in the market
A situation where the government provides goods efficiently
A situation where there is overproduction of public goods
#10
What is the main characteristic of a merit good?
It is always a public good
It is underproduced by the market
It is rivalrous and excludable
It is a luxury good
#11
In the context of types of goods, what is a common resource?
A good that is non-rivalrous and excludable
A good that is non-rivalrous but not excludable
A good that is rivalrous and excludable
A good that is rivalrous but not excludable
#12
What is a private good?
A good that is non-rivalrous and non-excludable
A good that is rivalrous and excludable
A good that is non-rivalrous but excludable
A good that is always provided by the government
#13
In the context of market failures, what is moral hazard?
The tendency of individuals to consume more when the price of a good decreases
The lack of information or the inability of individuals to make rational decisions
The risk that individuals or firms may engage in risky behavior because they do not bear the full costs of that behavior
The inequality that arises when income is not distributed evenly in a society
#14
What is a market externality?
A situation where individuals consume a good without paying for it
A side effect of an economic activity that affects other parties not directly involved in the activity
A situation where the government provides goods efficiently
A situation where there is perfect competition in the market
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