Quelpr
21 marksMarket Failure

CAPE Economics Unit 1 · 2009 · Paper 2 · Question 4(a)

Select any three pairs from (i) Private cost and social cost, (ii) Merit good and public good, (iii) Positive externality and negative externality, and (iv) Adverse selection and moral hazard, and distinguish between the concepts in each pair.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 4(b)(i)Using suitable examples, explain how public goods cause market failure.[6 marks]
  2. 4(b)(ii)Using suitable examples, explain how externalities cause market failure.[6 marks]
  3. 4(b)(iii)Using suitable examples, explain how moral hazards cause market failure.[6 marks]
  4. 4(c)Explain how governments can solve the problem caused by public goods.[11 marks]

More practice: the rest of this paper · more Market Failure questions · all CAPE Economics Unit 1 past papers