Scenario: Greater consumption of alcohol leads to more motor vehicle accidents and thus imposes costs on people who do not drink and drive.

Please select the answers from the following options

1) The type of market failure represented by the scenario is a/an

a) negative externailty

b) public good

c) asymmetric information

d) Positive externality

2) The market fails in this scenario because

a) no market transaction takes place

b) good are under consumed

c) goods are over consumed

d) no private provision

3) Solutions to the market failure is

a) subsidy

b) government provision

c) taxation

d) screening

e) signalling

4) The equilibrium quantity is .................. the socially efficient quantity.

a) greater than

b) less than

c) equal to

5) The private benefit curve is

a) shifts outward to the social benefit curve

b) shifts inward to the social benefit curve

c) remains unchanged

6) The private cost curve is

a) shifts outward to the social cost curve

b) shifts inward to the social cost curve

c) remains unchanged

7) The efficient output is found where the

a) social cost and social benefit curve intersect

b) private cost and social benefit curve intersect

c) private cost and private benefit curve intersect

d) social cost and private benefit curve