What this practice covers
These questions are drawn from past Cambridge IGCSE papers and filtered to market failure. 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.
Start practising Paper 1 MCQs →
What examiners see students get wrong here
These are the errors that cost marks on market failure, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Saying market failure means the market "stopped working". It means resources are allocated badly.
- Giving only one feature of a public good. Both non-excludable and non-rival are needed.
- Confusing merit goods with public goods. Merit goods are rival and excludable.
- Saying the market produces too little of a demerit good, it produces too much.
- Forgetting that externalities affect third parties, not the buyer or seller.
- Listing government policies without saying a drawback of any of them.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Market Failure revision notes.