What this practice covers
These questions are drawn from past IB Economics papers and filtered to externalities & common pool resources. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on externalities & common pool resources, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Mislabelling the MSC/MSB diagram, or shading the welfare-loss triangle on the wrong side of the social optimum.
- Confusing production with consumption externalities. Check whether the third-party effect arises from making the good or from using it.
- Saying "the market fails" without identifying which curve diverges and in which direction.
- Presenting one policy as a complete fix. Every policy question wants trade-offs.
- Describing a common pool resource as a public good. Public goods are non-rival; common pool resources are rival, which is exactly why they are depleted.
- Recommending a tax without saying how large it should be.
- Treating a tax on output as equivalent to a tax on emissions.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Externalities & Common Pool Resources revision notes.