Market Failure: Definition, Types, Causes & Examples Video


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question 1 of 3

When markets fail to allocate resources efficiently, what happens?

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1. What type of market failure occurs when a market does not supply any products at all?

2. What type of market failure occurs when products are supplied but in the wrong quantity or price?

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About This Quiz & Worksheet

There are many issues regarding product supply that can lead to market failure. You can use this quiz to check your understanding of the consequences of different types of market failures.

Quiz & Worksheet Goals

With this quiz/worksheet combo, you can check how much you know about the following:

  • The consequence of improper allocation of resources
  • Which type of failure occurs when a market doesn't supply any products
  • The type of failure that happens when products are supplied in the wrong quantity or are priced incorrectly
  • A type of market failure that tobacco companies may be involved with
  • Market failure that occurs as a result of individuals neglecting how their actions affect others

Skills Practiced

See how well you can practice the following skills by completing this quiz:

  • Distinguishing differences - compare and contrast topics from the lesson, such as a type of market failure that involves no distribution of products versus the market failure type involving wrong quantity or price for products
  • Information recall - remember what you've learned regarding different types of market failure
  • Knowledge application - use your knowledge to answer questions about product supply and how improper allocation leads to specific market failures

Additional Learning

You can get more details on market failure by reviewing the accompanying lesson on Market Failure: Definition, Types, Causes & Examples. The following objectives are covered in the lesson:

  • Define market failure
  • Compare and contrast demand versus supply
  • Discuss common causes of market failure