Statement I.We have market failure when our resources are not allocated efficiently.
Statement II.An oil refinery incurs both private and social (or external)costs.

Question

Quizplus · Accepted Answer

Statement I is true as market failure occurs when resources are not allocated efficiently. 
Statement II is true because an oil refinery incurs both private costs (such as labor, raw materials) and social costs (such as air pollution, noise pollution) which affect people outside the refinery. These social costs are not taken into account by the oil refinery when making their production decisions, leading to market failure. Hence, both statements are true.