Externalities Practice
Watch a market overproduce when costs spill onto bystanders, then apply a corrective tax and see the deadweight loss disappear. Five exam-style questions on negative and positive externalities.
One tile of the full efficiency and welfare unit.
The course teaches efficiency and welfare interactively — drag the graphs, practice with feedback, and spaced reviews bring it back before you forget. Free.
Interactive graph
Five practice questions
Pick an answer, then click Check answer to see the explanation.
Question 1 of 5
A factory dumps waste into a river, harming people downstream who are not part of the transaction. Compared with the efficient outcome, the unregulated market produces:
Question 2 of 5
To correct a negative externality with a tax, the government should set the tax equal to:
Question 3 of 5
Vaccinations protect the person vaccinated and everyone they would have infected. Left alone, the market for vaccinations will:
Question 4 of 5
On a graph of a negative externality, the deadweight loss triangle sits between the market quantity and the efficient quantity. What does that triangle measure?
Question 5 of 5
Why do externalities cause markets to fail in the first place?
What the course adds
Beyond this one page
The efficiency-and-welfare unit has dozens of practice questions on externalities, corrective taxes and subsidies, public goods, and deadweight loss. Each session pulls from your weak spots — not the same five questions every time.
Spaced reviews
FSRS brings every concept back right before you'd forget. ~50% better retention than re-reading.
Per-concept mastery
Performance Factor Analysis tracks each sub-skill separately — you see which version of the idea is still wobbly.
Diagnostic placement
A short test skips you past what you already know. No re-learning the basics.
For instructors
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Sends students to the full page with the worked example and related lessons.
Inlines just the interactive widget in your LMS — no nav, no footer, no signup wall.
Want 50+ more problems with instant feedback?
The full Econ Academy efficiency-and-welfare unit includes adaptive practice, spaced repetition, and mastery tracking so you stop forgetting what you just learned.