Are the path statements correct? Has the Algebra and TeX tools both been activated? These are the usual problems.
Go to Adminsitration > Modules > Filters > Manage Filters and check to see if bothe Algebra and Tex Notation Filters have been activated. If not then click on the closed eyes and they should become active.
Then go to Administration > Modules > Filters > Tex Notation and look fo rthe path statements for latex, dvips and convert and see oif they have tocks and then the path statements along side the text boxes. If not, then you really need to discuss this with your Network Admin, the first part may not be fixed from within Moodle. If the required tools are missing then it will never work - so you need your network admin to install the required programs. Once there, make sure you have put the correct absolute paths to the programs, which is easier on a local machine than it is on a server. Good luck.
EDIT: There should not be an issue with it being a quiz, as long as you are writing in the quiz and not trying to import...mmm but maybe that is not right either... mmmm not sure if it is an issue. I do seem to recall some problem with TeX and quizzes...