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UI Post-UTME Economics 2025 (Model questions) Question 22

Question 22

Market Structures

The following are associated with market failure:
I. Negative externalities such as pollution from factories
II. Public goods being under-provided by the private sector
III. Perfect information available to all buyers and sellers
IV. Monopoly power leading to allocative inefficiency

  1. A.I, II and IV only
  2. B.I and III only
  3. C.III and IV only
  4. D.All of the above
Show the answer and explanation

Answer: A (I, II and IV only)

Explanation

Externalities, under-provision of public goods and monopoly power cause market failure. Perfect information helps markets work well.