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maximises social welfare, producing too much or too little of a good or service."},{"text":"shortage of resources","correct":false,"explanation":"Resource scarcity exists in all economic systems and is not itself market failure. The correct term is misallocation of resources, where market output differs from the socially efficient level."},{"text":"allocation of income","correct":false,"explanation":"Income allocation concerns how earnings are distributed between people, rather than whether resources produce the right output. Market failure is a misallocation of resources relative to social welfare."},{"text":"surplus of resources","correct":false,"explanation":"A surplus can occur in a particular market, but it does not define market failure. The correct answer is misallocation of resources, which includes both over-production and under-production."}]},{"id":"e170661e-f3af-4cea-ac4f-e1234a164533","cardType":"basic","points":1,"front":"What production outcome indicates market failure?","back":"Output is above or below the socially optimal level.","mcqOptions":[{"text":"Output is above or below the socially optimal level.","correct":true,"explanation":"Market failure is indicated when the market quantity is not where marginal social benefit equals marginal social cost, so output is either over-produced or under-produced."},{"text":"Output is equal to the socially optimal level.","correct":false,"explanation":"Equality with the socially optimal level means MSC equals MSB and resources are efficiently allocated. Market failure occurs when output is above or below that level."},{"text":"Output is equal to the profit-maximising level.","correct":false,"explanation":"Firms normally aim for profit maximisation using private costs and benefits, which may ignore external effects. Market failure concerns output differing from the socially optimal level."},{"text":"Output is above the private equilibrium level.","correct":false,"explanation":"The private equilibrium level is determined by private demand and supply, not social costs and benefits. Market failure is output above or below the socially optimal level."}]},{"id":"2f4d813f-f986-4f52-b1dc-cc9bee2e0609","cardType":"basic","points":1,"front":"What makes market failure complete?","back":"The market is missing entirely.","mcqOptions":[{"text":"The market is missing entirely.","correct":true,"explanation":"Complete market failure occurs where no market forms at all, so the good is not supplied through market exchange, as can happen with pure public goods."},{"text":"The market is perfectly competitive.","correct":false,"explanation":"Perfect competition is a market structure that can promote allocative efficiency when no externalities exist. Complete market failure means the market is missing entirely."},{"text":"The market is regulated by government.","correct":false,"explanation":"Government regulation can address a market failure by changing incentives or restricting harmful activity. Complete market failure occurs when no market exists in the first place."},{"text":"The market is temporarily oversupplied.","correct":false,"explanation":"Temporary excess supply is a disequilibrium within an existing market. Complete market failure describes the absence of any market for the good or service."}]},{"id":"76d824d5-c050-4ab0-ac9c-c84d0bed9fa4","cardType":"basic","points":1,"front":"What makes market failure partial?","back":"A market exists but misallocates resources.","mcqOptions":[{"text":"A market exists but misallocates resources.","correct":true,"explanation":"Partial market failure means buyers and sellers operate in a market, but private decisions produce an output different from the socially optimal quantity."},{"text":"A market exists but allocates resources efficiently.","correct":false,"explanation":"Efficient allocation means output is socially optimal, so there is no market failure. Partial market failure requires an existing market that misallocates resources."},{"text":"A market exists but sets no price.","correct":false,"explanation":"A functioning market normally establishes a price through demand and supply. Partial market failure is about inefficient resource allocation, not simply the absence of a price."},{"text":"A market exists but eliminates scarcity.","correct":false,"explanation":"Scarcity cannot be eliminated because resources are finite relative to wants. Partial market failure occurs when an existing market misallocates those scarce resources."}]},{"id":"c3abe047-e1fc-46a1-8430-1fef7c8d5fcd","cardType":"cloze","points":null,"front":"A pure public good may experience [ ] because no market exists.","back":"A pure public good may experience complete market failure because no market exists.","mcqOptions":[{"text":"complete market failure","correct":true,"explanation":"Pure public goods are non-excludable and non-rival, creating a free-rider problem that prevents private suppliers charging users. No market forms, so market failure is complete."},{"text":"partial market failure","correct":false,"explanation":"Partial market failure requires a market to exist but allocate resources inefficiently. A pure public good may have no private market because free riders cannot be excluded."},{"text":"government failure","correct":false,"explanation":"Government failure concerns inefficient intervention by the state. The issue here is that no private market exists for a pure public good, causing complete market failure."},{"text":"consumer sovereignty","correct":false,"explanation":"Consumer sovereignty means consumer preferences influence production through market demand. Pure public goods cannot be effectively supplied through such a market, leading to complete market failure."}]},{"id":"6e8c36dd-6cbe-438a-a2bb-b04ce3ac3cfb","cardType":"basic","points":2,"front":"Why is production by a polluting factory a partial market failure?","back":"The market exists but over-produces because pollution is ignored.","mcqOptions":[{"text":"The market exists but over-produces because pollution is ignored.","correct":true,"explanation":"The factory's private costs exclude the external cost imposed by pollution. Its supply is therefore too high and output exceeds the level where marginal social cost equals marginal social benefit."},{"text":"The market exists but under-produces because pollution is ignored.","correct":false,"explanation":"Ignoring pollution makes production appear cheaper than it is to society, encouraging excess output. The correct outcome is over-production, because marginal social cost exceeds marginal private cost."},{"text":"The market exists but produces efficiently because pollution is ignored.","correct":false,"explanation":"Pollution is an external cost, so ignoring it creates a divergence between private and social costs. The market over-produces rather than reaching the socially efficient output."},{"text":"The market exists but stops producing because pollution is ignored.","correct":false,"explanation":"Pollution being ignored lowers the producer's perceived costs and makes production more attractive, not less. This causes over-production in an existing market."}]},{"id":"64d9d107-a35a-4f10-a29e-78b643761efd","cardType":"basic","points":1,"front":"What does marginal social cost (MSC) show?","back":"The rising social cost of producing one extra unit.","mcqOptions":[{"text":"The rising social cost of producing one extra unit.","correct":true,"explanation":"MSC measures the additional total cost to society of one more unit, including private production costs and any external costs. It commonly rises as output expands."},{"text":"The rising private cost of producing one extra unit.","correct":false,"explanation":"Marginal private cost excludes external costs imposed on third parties, such as pollution. MSC includes both private and external costs, making it the relevant social measure."},{"text":"The falling social cost of producing one extra unit.","correct":false,"explanation":"The usual marginal-cost assumption is that additional units become more costly as output rises. MSC shows the rising social cost of producing one extra unit."},{"text":"The rising social benefit of consuming one extra unit.","correct":false,"explanation":"Marginal social benefit concerns the extra benefit from consumption, whereas MSC concerns the extra cost of production. MSC shows rising social cost per additional unit."}]},{"id":"84ba05a6-9003-490f-90a3-d5aa9c4762b7","cardType":"basic","points":1,"front":"What does marginal social benefit (MSB) show?","back":"The falling social benefit from consuming one extra unit.","mcqOptions":[{"text":"The falling social benefit from consuming one extra unit.","correct":true,"explanation":"MSB is the additional benefit to society from one more unit consumed, including external benefits. Diminishing marginal utility means this benefit normally falls as consumption rises."},{"text":"The falling private benefit from consuming one extra unit.","correct":false,"explanation":"Marginal private benefit includes only the consumer's own gain. MSB also includes external benefits received by others, so it is the relevant social measure."},{"text":"The rising social benefit from consuming one extra unit.","correct":false,"explanation":"Diminishing marginal utility means successive units generally generate less additional benefit. MSB therefore shows the falling social benefit from consuming one extra unit."},{"text":"The falling social cost of producing one extra unit.","correct":false,"explanation":"Social cost is measured by MSC and relates to production, not consumption benefits. MSB shows the falling social benefit from each additional unit consumed."}]},{"id":"7f8d7478-df8a-4e21-a1b0-01918eed4746","cardType":"cloze","points":null,"front":"The social optimum occurs where $\\text{[...]}$.","back":"The social optimum occurs where $\\boxed{MSC = MSB}$.","mcqOptions":[{"text":"$$MSC = MSB$","correct":true,"explanation":"At this quantity, the social benefit of the last unit exactly equals its social cost. Producing more or fewer units would reduce total social welfare."},{"text":"$$MPC = MPB$","correct":false,"explanation":"MPC equals MPB identifies the free-market equilibrium based on private costs and benefits. The social optimum requires MSC to equal MSB, including external effects."},{"text":"$$MSC = MPB$","correct":false,"explanation":"This comparison includes social costs but excludes external benefits from the benefit side. The social optimum is where total social cost equals total social benefit: MSC = MSB."},{"text":"$$MPC = MSB$","correct":false,"explanation":"This comparison includes social benefits but leaves out external costs of production. The socially efficient condition is MSC = MSB, with both sides measured socially."}]},{"id":"69c935ea-8f38-4bad-9b47-16fb4cd85e31","cardType":"basic","points":2,"front":"Why is the quantity where MSC = MSB socially optimal?","back":"All units with MSB at least equal to MSC are produced.","mcqOptions":[{"text":"All units with MSB at least equal to MSC are produced.","correct":true,"explanation":"Each unit whose marginal social benefit is at least its marginal social cost adds to total welfare. Output stops where the next unit's social benefit no longer exceeds its social cost."},{"text":"All units with MSC greater than MSB are produced.","correct":false,"explanation":"Producing units for which marginal social cost exceeds marginal social benefit destroys net social welfare. The optimum includes units with MSB at least equal to MSC."},{"text":"All units with MPB at least equal to MPC are produced.","correct":false,"explanation":"This condition describes privately worthwhile units and can ignore external costs or benefits. Social optimality requires MSB to be at least equal to MSC."},{"text":"All units with MSB less than MSC are produced.","correct":false,"explanation":"Where MSB is less than MSC, an extra unit costs society more than it benefits society. Such units should not be produced at the social optimum."}]},{"id":"f70a5e0c-b138-488e-bde6-06f19e97fc98","cardType":"basic","points":1,"front":"What does $Q_1 < Q^*$ show?","back":"The good is under-produced relative to the social optimum.","mcqOptions":[{"text":"The good is under-produced relative to the social optimum.","correct":true,"explanation":"Because Q1 is less than Q*, fewer units are produced than would maximise social welfare. The forgone units have marginal social benefits greater than their marginal social costs."},{"text":"The good is over-produced relative to the social optimum.","correct":false,"explanation":"Over-production would require actual output to exceed Q*. Since Q1 is below Q*, the quantity is under-produced relative to the social optimum."},{"text":"The good is efficiently produced relative to the social optimum.","correct":false,"explanation":"Efficient production occurs at Q*, where MSC equals MSB. Q1 is explicitly smaller than Q*, so output is under-produced and welfare is lost."},{"text":"The good is not produced relative to the social optimum.","correct":false,"explanation":"Q1 represents a positive output level, just one below Q*. The good is being produced, but it is under-produced relative to the social optimum."}]},{"id":"c4f8e5d2-9fe0-4d6d-bdc7-7626877a6a3e","cardType":"basic","points":2,"front":"Where is deadweight welfare loss shown when output is $Q_1$ rather than $Q^*$?","back":"Between MSB and MSC, from $Q_1$ to $Q^*$.","mcqOptions":[{"text":"Between MSB and MSC, from $Q_1$ to $Q^*$.","correct":true,"explanation":"For every forgone unit between Q1 and Q*, marginal social benefit exceeds marginal social cost. The area between the MSB and MSC curves over that range is deadweight welfare loss."},{"text":"Between MSB and MSC, from $0$ to $Q_1$.","correct":false,"explanation":"Units up to Q1 are actually produced, so they are not the forgone welfare from under-production. The loss is the area between MSB and MSC from Q1 to Q*."},{"text":"Between MSB and MSC, from $Q^*$ onwards.","correct":false,"explanation":"Beyond Q*, marginal social cost exceeds marginal social benefit, which relates to over-production. Under-production loss lies between the actual Q1 and optimal Q* quantities."},{"text":"Between MPB and MPC, from $Q_1$ to $Q^*$.","correct":false,"explanation":"Private curves show private incentives and omit external effects. Deadweight welfare loss is assessed using social welfare, so it is the area between MSB and MSC."}]},{"id":"e108c1af-927e-414f-8c85-d3d5c0841912","cardType":"basic","points":1,"front":"What does the deadweight welfare loss from under-production represent?","back":"The net social benefit lost because output stops below $Q^*$.","mcqOptions":[{"text":"The net social benefit lost because output stops below $Q^*$.","correct":true,"explanation":"The unproduced units between actual output and Q* would have generated more social benefit than social cost. Their cumulative forgone surplus is the deadweight welfare loss."},{"text":"The net private benefit lost because output stops below $Q^*$.","correct":false,"explanation":"Private benefit excludes external benefits and costs, so it cannot measure the full welfare effect. Deadweight welfare loss is the net social benefit lost from forgone units."},{"text":"The net social cost gained because output stops below $Q^*$.","correct":false,"explanation":"Stopping below Q* prevents units whose social benefits exceed their costs, so society loses net benefit. It does not gain net social cost from the under-production."},{"text":"The total social benefit lost because output stops below $Q^*$.","correct":false,"explanation":"The relevant loss is not all benefit from the forgone units because producing them would also incur social costs. DWL is the net social benefit lost after those costs."}]},{"id":"a935cd0d-7d37-41af-a7cd-9a21856df398","cardType":"basic","points":2,"front":"Calculate DWL if the MSB-MSC gap is $\\pounds 4$ and under-production is $10{,}000$ units.","back":"$$\\frac{1}{2} \\times \\pounds 4 \\times 10{,}000 = \\boldsymbol{\\pounds 20{,}000}$","mcqOptions":[{"text":"$$\\frac{1}{2} \\times \\pounds 4 \\times 10{,}000 = \\boldsymbol{\\pounds 20{,}000}$","correct":true,"explanation":"The deadweight loss is a triangle, so use one half multiplied by the MSB-MSC gap and the output shortfall: 0.5 x 4 x 10,000 = 20,000 pounds."},{"text":"$$1 \times \n3 4 \times 10{,}000 = strong{\n3 40{,}000}$","correct":false,"explanation":"This treats the deadweight-loss triangle as a rectangle and omits the one-half factor. Using the triangular area formula gives 0.5 x 4 x 10,000 = 20,000 pounds."},{"text":"$$rac{1}{2} \times \n3 4 \times 1{,}000 = strong{\n3 2{,}000}$","correct":false,"explanation":"This loses a zero when converting the 10,000-unit shortfall into the calculation. The correct triangular area is 0.5 x 4 x 10,000, which equals 20,000 pounds."},{"text":"$$rac{1}{2} \times \n3 40 \times 10{,}000 = strong{\n3 200{,}000}$","correct":false,"explanation":"This shifts the 4-pound marginal gap one decimal place too far, treating it as 40 pounds. The given gap is 4 pounds, producing a deadweight loss of 20,000 pounds."}]},{"id":"9999e91f-4652-4153-9541-0cb323e19da1","cardType":"cloze","points":null,"front":"Vaccination creates a [ ] by reducing infection risk for others.","back":"Vaccination creates a positive externality by reducing infection risk for others.","mcqOptions":[{"text":"positive externality","correct":true,"explanation":"Vaccination benefits people other than the vaccinated individual by reducing transmission risk. This spillover benefit is a positive externality of consumption."},{"text":"negative externality","correct":false,"explanation":"A negative externality imposes an uncompensated cost on third parties, such as pollution. Reduced infection risk benefits others, so vaccination creates a positive externality."},{"text":"merit good","correct":false,"explanation":"Vaccination may be considered a merit good because it is under-consumed, but the specific benefit to other people is a positive externality. The blank asks for that spillover effect."},{"text":"public good","correct":false,"explanation":"A public good must be non-rival and non-excludable, whereas a vaccination dose can be withheld from non-payers and used by one person. Its wider protection is a positive externality."}]},{"id":"5ff3b9e8-84f3-4b4f-b012-a023cced4ce8","cardType":"basic","points":2,"front":"Why does a free market under-provide vaccination?","back":"Individuals ignore the wider social benefit, so private demand is too low.","mcqOptions":[{"text":"Individuals ignore the wider social benefit, so private demand is too low.","correct":true,"explanation":"Consumers consider their own protection but may not fully value reduced infection risk for others. This makes marginal private benefit lower than marginal social benefit and demand too low."},{"text":"Individuals ignore the wider social cost, so private demand is too low.","correct":false,"explanation":"Vaccination generates benefits for others through reduced transmission, rather than an unpriced wider social cost. Ignoring this wider social benefit causes private demand to be too low."},{"text":"Individuals ignore the private benefit, so private demand is too low.","correct":false,"explanation":"Consumers normally take their own health protection into account when deciding whether to vaccinate. They may ignore the wider social benefit to others, which causes under-provision."},{"text":"Individuals ignore the wider social benefit, so private demand is too high.","correct":false,"explanation":"When external benefits are ignored, consumers underestimate the total value of vaccination. Private demand is therefore too low, not too high, compared with the socially optimal quantity."}]},{"id":"8a6c407b-c41a-43f5-9c1f-efc7d28f6890","cardType":"basic","points":2,"front":"Why is under-provision of vaccination a partial market failure?","back":"A vaccine market exists, but output is below $Q^*$.","mcqOptions":[{"text":"A vaccine market exists, but output is below $Q^*$.","correct":true,"explanation":"Vaccination is partially market-failed because private provision exists, but positive external benefits mean the market equilibrium quantity is below the socially optimal quantity, $Q^*$."},{"text":"A vaccine market exists, but output is above $Q^*$.","correct":false,"explanation":"The market does not usually overprovide vaccinations relative to the social optimum. Positive externalities are undervalued by consumers, so the correct outcome is output below $Q^*$."},{"text":"No vaccine market exists, so output is zero.","correct":false,"explanation":"Vaccines are bought and sold privately, so a market does exist. The partial failure is that positive externalities cause under-consumption and output below $Q^*$, rather than zero output."},{"text":"A vaccine market exists, and output is equal to $Q^*$.","correct":false,"explanation":"Equality between market output and $Q^*$ would indicate an efficient outcome. Because consumers do not account fully for external benefits, vaccination is underprovided below the socially optimal quantity."}]},{"id":"e0fc43bb-d000-42ab-aa26-49a071df0854","cardType":"cloze","points":null,"front":"An unregulated market directs scarce goods according to [ ] rather than need.","back":"An unregulated market directs scarce goods according to ability to pay rather than need.","mcqOptions":[{"text":"ability to pay","correct":true,"explanation":"Market prices allocate scarce goods to consumers able and willing to pay, so purchasing power influences access even when people with greater need cannot afford them."},{"text":"level of need","correct":false,"explanation":"Need-based allocation is associated with equity or public provision, not an unregulated market. Market allocation follows ability to pay, which can leave important needs unmet."},{"text":"government priority","correct":false,"explanation":"Government priorities can determine allocation through taxation, subsidies, or rationing, but an unregulated market has no such central decision-maker. It allocates through ability to pay."},{"text":"equality of income","correct":false,"explanation":"An unregulated market does not distribute goods according to equal incomes. Prices direct goods towards those with sufficient purchasing power, meaning allocation follows ability to pay."}]},{"id":"37203f57-0e1f-42f5-9700-bde646524129","cardType":"basic","points":2,"front":"How can inequality misallocate resources?","back":"Resources may go to luxuries while basic needs remain unmet.","mcqOptions":[{"text":"Resources may go to luxuries while basic needs remain unmet.","correct":true,"explanation":"Unequal incomes give wealthier consumers more purchasing power, allowing markets to devote resources to luxury goods while poorer people may lack access to essential goods and services."},{"text":"Resources may go to basic needs while luxuries remain unmet.","correct":false,"explanation":"This reverses the usual concern about inequality. Purchasing power from high incomes can attract resources towards luxuries, while insufficient income leaves some basic needs unmet."},{"text":"Resources may go to public goods while private goods remain unmet.","correct":false,"explanation":"Inequality concerns the distribution of purchasing power and the resulting mix of goods, especially luxury goods versus necessities. Public goods are mainly underprovided because of non-excludability."},{"text":"Resources may go to equal consumption while individual choices remain unmet.","correct":false,"explanation":"Markets do not generally produce equal consumption under unequal incomes. Different purchasing power instead influences demand, potentially prioritising luxuries over goods required to meet basic needs."}]},{"id":"a8c1bee2-8e4a-417a-89d3-eecee389aba9","cardType":"basic","points":3,"front":"How does equality differ from equity?","back":"

Equality: similarity of distribution
Equity: fairness of distribution

","mcqOptions":[{"text":"

Equality: similarity of distribution
Equity: fairness of distribution

","correct":true,"explanation":"Equality describes how similar the distribution is between people, whereas equity concerns whether that distribution is fair, which may require treating people differently according to their circumstances."},{"text":"

Equality: fairness of distribution
Equity: similarity of distribution

","correct":false,"explanation":"The definitions have been reversed. Equality refers to similarity in distribution, while equity is the broader judgement about whether the distribution is fair."},{"text":"

Equality: equal outcomes only
Equity: equal opportunities only

","correct":false,"explanation":"These descriptions are too narrow and incorrectly equate equity with opportunity alone. Equality concerns similarity of distribution, while equity concerns the fairness of distribution."},{"text":"

Equality: individual choice
Equity: market efficiency

","correct":false,"explanation":"Individual choice and market efficiency are separate economic ideas, not definitions of equality and equity. The distinction is similarity of distribution versus fairness of distribution."}]},{"id":"e71ae5cc-d5f7-4dd7-9275-df89a35a8ea2","cardType":"cloze","points":null,"front":"A $\\pounds 10{,}000$ treatment is about $\\text{[...]}$ of a $\\pounds 15{,}000$ income and about $7\\%$ of a $\\pounds 150{,}000$ income.","back":"A $\\pounds 10{,}000$ treatment is about $\\boxed{67\\%}$ of a $\\pounds 15{,}000$ income and about $7\\%$ of a $\\pounds 150{,}000$ income.","mcqOptions":[{"text":"$$67\\%$","correct":true,"explanation":"Dividing the treatment cost by income gives $10{,}000 \\div 15{,}000 = 0.667$, which is approximately $67\\%$ of the lower income."},{"text":"$$66\\%$","correct":false,"explanation":"The calculation is $10{,}000 \\div 15{,}000 = 66.7\\%$, which rounds to $67\\%$. Truncating the decimal instead of rounding produces this near-miss value."},{"text":"$$60\\%$","correct":false,"explanation":"Using a rough denominator or rounding too early can produce $60\\%$, but the precise ratio is $10{,}000 \\div 15{,}000 = 66.7\\%$, approximately $67\\%$."},{"text":"$$75\\%$","correct":false,"explanation":"This value can result from using an incorrect income denominator. The relevant calculation is $10{,}000 \\div 15{,}000$, which equals about $67\\%$, not three-quarters."}]},{"id":"a79b23ff-6476-4eda-9413-736273454d44","cardType":"cloze","points":null,"front":"A $\\pounds 10{,}000$ treatment is about $67\\%$ of a $\\pounds 15{,}000$ income and about $\\text{[...]}$ of a $\\pounds 150{,}000$ income.","back":"A $\\pounds 10{,}000$ treatment is about $67\\%$ of a $\\pounds 15{,}000$ income and about $\\boxed{7\\%}$ of a $\\pounds 150{,}000$ income.","mcqOptions":[{"text":"$$7\\%$","correct":true,"explanation":"Dividing the treatment cost by the higher income gives $10{,}000 \\div 150{,}000 = 0.0667$, which is approximately $7\\%$."},{"text":"$$6\\%$","correct":false,"explanation":"The exact ratio is $10{,}000 \\div 150{,}000 = 6.67\\%$. Rounding down rather than to the nearest whole percentage gives $6\\%$, but the correct approximation is $7\\%$."},{"text":"$$67\\%$","correct":false,"explanation":"This applies the percentage calculated using the $15{,}000$ income to the $150{,}000$ income. The tenfold larger income reduces the proportion to approximately $7\\%$."},{"text":"$$15\\%$","correct":false,"explanation":"This confuses the income figure with the percentage calculation. Dividing $10{,}000$ by $150{,}000$ gives $6.67\\%$, which rounds to $7\\%$."}]},{"id":"cf594795-5e3b-48dc-befd-79de23e61e53","cardType":"basic","points":2,"front":"Why does judging whether inequality is inequitable involve a value judgement?","back":"Because deciding what is fair is subjective.","mcqOptions":[{"text":"Because deciding what is fair is subjective.","correct":true,"explanation":"Whether an unequal distribution is inequitable depends on values and opinions about fairness. Different people may reasonably judge the same distribution differently, so the decision is subjective."},{"text":"Because deciding what is efficient is objective.","correct":false,"explanation":"Efficiency can often be assessed using economic criteria, but this does not determine whether an outcome is fair. Judging inequity requires a subjective value judgement about fairness."},{"text":"Because deciding what is equal is measurable.","correct":false,"explanation":"Equality can be measured by comparing distributions, but measurement alone cannot establish whether a distribution is fair. Equity involves a subjective judgement about fairness."},{"text":"Because deciding what is profitable is subjective.","correct":false,"explanation":"Profitability concerns returns to firms and is separate from equity. The relevant value judgement is whether the distribution of resources is fair, which different people may assess differently."}]}]}],"examCountdown":{"examDate":"2027-05-10","paperLabel":"Paper 1"},"heading":"1.8.2 The meaning of market failure","title":"1.8.2 The meaning of market failure Flashcards","topbar":{"backHref":"/a-level/economics/aqa/flashcards"},"topicSidebar":"$L38"}]}],"topicId":"8acf73af-e306-52e9-ba65-863daf202d28","walled":"$L39"}],"$L3a","$L3b"]