Kramizo
Log inSign up free
Home › CIE IGCSE Economics › Market failure: externalities (positive and negative)
CIE · IGCSE · Economics

Market failure: externalities (positive and negative)
Practice Questions

20 CIE IGCSE Economics questions on Market failure: externalities (positive and negative), each with instant feedback and a full examiner-style mark scheme.

⚡ Start Quiz on Market failure: externalities (positive and negative) →📖 Read Revision NotesTry one question
✨ Revision guide includes key terms, worked examples and exam technique for Market failure: externalities (positive and negative).

Try 2 sample questions on Market failure: externalities (positive and negative)

Question 1 · 1 mark · Difficulty 1/3

What is the term used to describe the costs or benefits of an economic activity that affect third parties who are not directly involved in the transaction?

  1. Private costs
  2. Externalities
  3. Opportunity costs
  4. Social benefits
Show answer & explanation
✓ Answer: B — Externalities
Award 1 mark for identifying externalities as costs or benefits affecting third parties not involved in the transaction. A is incorrect — private costs are borne by the producer or consumer directly involved. C is incorrect — opportunity costs refer to the next best alternative forgone. D is incorrect — social benefits include both private benefits and external benefits, but the term does not specifically describe third-party effects.
Question 2 · 1 mark · Difficulty 2/3

A government in South America decides to subsidise vaccinations to encourage higher uptake among the population. Which economic concept best justifies this policy?

  1. Vaccinations generate negative externalities of consumption
  2. Vaccinations generate positive externalities of consumption
  3. Vaccinations are demerit goods
  4. Vaccinations have zero opportunity cost
Show answer & explanation
✓ Answer: B — Vaccinations generate positive externalities of consumption
Award 1 mark for identifying that when individuals are vaccinated, third parties benefit through reduced disease transmission (herd immunity). A is incorrect — vaccinations create benefits, not costs, to third parties. C is incorrect — vaccinations are merit goods, not demerit goods. D is incorrect — all goods have opportunity costs in terms of resources used.
⚡ Start a Quiz on Market failure: externalities (positive and negative) →
20 questions · 25 min · free

CIE IGCSE Economics: Market failure: externalities (positive and negative) FAQ

How many CIE IGCSE Economics questions on Market failure: externalities (positive and negative) are there on Kramizo?
Kramizo currently has 20 exam-board-aligned practice questions on Market failure: externalities (positive and negative) for CIE IGCSE Economics, with new questions added every week. Each question gives you instant feedback and a full examiner-style mark scheme that tells you exactly what would earn marks on a real CIE paper. The questions span the full difficulty range — from straightforward recall (level 1) right up to multi-step reasoning and evaluation (level 3) — so the bank works for first-pass revision and final exam-week stress testing alike.
Is Kramizo free for CIE IGCSE students preparing for Economics?
Yes — completely free. Every student gets 45 questions a day on the free plan, with no card required and no trial countdown. That free quota works across every subject and every topic in our bank, so you can mix Market failure: externalities (positive and negative) practice with other Economics topics or even switch to a totally different CIE subject without paying anything. Kramizo's optional Pro plan removes the daily cap and adds detailed progress analytics, but the free tier is the real product — used by thousands of GCSE, IGCSE and CSEC students.
Are the Market failure: externalities (positive and negative) questions aligned to the official CIE IGCSE Economics syllabus?
Every question is written against the published CIE IGCSE Economics specification, including the exact command words (state, describe, explain, calculate, evaluate, etc.), mark allocations, and difficulty tier you'd see on a real CIE paper. Explanations are written in the style of official examiner mark schemes — they tell you what is being awarded marks and why distractors are wrong, not just whether you got it right. The bank is continually refined to match the latest syllabus updates from CIE.
How is Market failure: externalities (positive and negative) typically tested on CIE IGCSE Economics papers?
Market failure: externalities (positive and negative) appears across multiple question types on real CIE IGCSE Economics papers — most commonly as multiple-choice questions in the objective section, structured short-answer questions in the main paper, and occasionally as part of an extended response. Kramizo's practice bank reflects that mix: 4-option MCQs, true/false statements, fill-in-the-blank key terms, multi-select questions, and ordering questions. Working through the bank gives you exposure to every question style examiners actually use.

Lock in Market failure: externalities (positive and negative) before exam day.

Start practising in 30 seconds — no card required.

⚡ Start Quiz Free →