Theme 1: Markets and market failure - Edexcel A-Level Economics A quiz

The money price actually paid for a good in the shop

The total cost of every single alternative added up together

The extra cost of producing just one more unit of output

The value of the next best alternative forgone

Using its resources unemployed or inefficiently

Productively efficient and operating at full employment of resources

Producing a currently unattainable combination of the two goods

Experiencing strong long-run economic growth over time

Raising the minimum wage increases unemployment among the low-paid

The government ought to raise the minimum wage

Inflation in the UK was above the 2 per cent target last year

A fall in supply raises the equilibrium price

The price of the good itself

Consumer income

The price of another good

The cost of production

Both rival in consumption and fully excludable

Non-rival in consumption but still excludable

Rival in consumption yet non-excludable

Non-rival and non-excludable

Marginal social cost exceeds marginal private cost

Marginal social benefit exceeds marginal private benefit

The market under-produces the good

There is no welfare loss

It is completely non-excludable, so firms simply cannot charge anyone for it

Individuals undervalue its long-term private and external benefits

It generates only negative externalities for third parties in society

Its supply is perfectly inelastic at every possible market price

Above the equilibrium price

Exactly at the equilibrium price

Below the equilibrium price

At zero

Increase the quantity produced and consumed toward the social optimum

Lower the overall price paid by ordinary consumers

Provide the good completely free at the point of use

Internalise the externality so price reflects social cost

Leaves society worse off overall than the original market failure

Successfully corrects a market failure at a relatively low cost

Achieves every single macroeconomic objective all at the same time

Has any small administrative cost whatsoever attached to it