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WRAP-UP To summarize what you have learned in the lesson, answer the following questions: 1. What is the market failure? 2. What are the causes of market failure? 3. What are the government interventions for market failure? POSTTEST Directions: Read each statement carefully. Write T if the statement is correct, otherwise write F. 1. The normal goods are goods where the total cost of production does not increase with the number of consumers. 2. A free-rider problem means someone benefiting from resources or goods and services without paying for the cost of the benefit. 3. A demerit good is a private good that society believes is under consumed, often with positive externalities. 4. Subsidies are most appropriate to encourage behavior that has positive externalities. 5. A merit good is a private good that society believes is over consumed, often with negative externalities