Unit 2: Microeconomics
Topic 2.8: Market Failure — Externalities and Common Pool Resources Questions
Practice 20 exam-style questions for IB Economics Topic 2.8. Review the question stems below, then unlock the full Question Bank to access markschemes, model answers, and AI grading.
14 marks
Define negative externality and give one example of a negative externality of production and one of consumption.
Markscheme and model answer locked
Unlock Question21 mark
A negative externality of production occurs when:
Markscheme and model answer locked
Unlock Question31 mark
Education is often cited as a good with positive externalities because:
Markscheme and model answer locked
Unlock Question41 mark
Overfishing in international waters is an example of:
Markscheme and model answer locked
Unlock Question54 marks
Define positive externality and give one example of a positive externality of production and one of consumption.
Markscheme and model answer locked
Unlock Question61 mark
A negative externality of production occurs when:
Markscheme and model answer locked
Unlock Question74 marks
Define negative externality and give one example of a negative externality of production and one of consumption.
Markscheme and model answer locked
Unlock Question81 mark
A positive externality of consumption occurs when:
Markscheme and model answer locked
Unlock Question91 mark
Overfishing in international waters is an example of:
Markscheme and model answer locked
Unlock Question101 mark
A positive externality of consumption occurs when:
Markscheme and model answer locked
Unlock Question111 mark
An example of a negative externality of consumption is:
Markscheme and model answer locked
Unlock Question121 mark
Education is often cited as a good with positive externalities because:
Markscheme and model answer locked
Unlock Question131 mark
An example of a negative externality of consumption is:
Markscheme and model answer locked
Unlock Question144 marks
Define positive externality and give one example of a positive externality of production and one of consumption.
Markscheme and model answer locked
Unlock Question151 mark
A government subsidy to correct the underconsumption of a good with positive externalities aims to:
Markscheme and model answer locked
Unlock Question164 marks
Explain two possible government responses to negative externalities of production.
Markscheme and model answer locked
Unlock Question171 mark
When positive externalities exist, the free market will:
Markscheme and model answer locked
Unlock Question184 marks
Using a diagram or explanation, show why negative externalities of production lead to overproduction.
Markscheme and model answer locked
Unlock Question204 marks
Explain the concept of marginal external cost using an example.
Markscheme and model answer locked
Unlock QuestionReady to practice Topic 2.8?
Get instant AI feedback on your answers, view detailed markschemes, and track your progress across all IB Economics topics.
Start Practising Now