Social Studies

10th

grade

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Market Failures Quiz

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16 questions

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  • 1. Multiple Choice
    30 seconds
    1 pt
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    Driving a car on crowded highway produces

    a negative externality.

    a positive externality.

  • 2. Multiple Choice
    30 seconds
    1 pt
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    Apartment dwellers who buy fire alarms or fire extinguishers generate a

    negative externality.

    positive externality.

  • 3. Multiple Choice
    30 seconds
    1 pt

    A tax equal to the external cost on firms that emit pollutants would

    not reduce pollution levels at all.

    provide firms with the incentive to increase the level of activity creating the pollution.

    provide firms with the incentive to decrease the level of activity creating the pollution.

    provide firms with little incentive to search for less environmentally damaging production methods.

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