Merit and Demerit Goods (AQA A-Level Economics): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What is a merit good?
What is a merit good?
Social benefits > individual benefits
Which equation represents social benefit?
Which equation represents social benefit?
benefit
Why do people under-consume merit goods due to information failure?
Why do people under-consume merit goods due to information failure?
Focus on short-term not long-term benefits
Which is an example of a merit good?
Which is an example of a merit good?
Preventative dental care
At what level does under-consumption of merit goods occur in free markets?
At what level does under-consumption of merit goods occur in free markets?
where
What is a demerit good?
What is a demerit good?
Social costs > private costs to consumer
Which equation represents social cost?
Which equation represents social cost?
cost
Free-market provision of demerit goods leads to what outcome?
Free-market provision of demerit goods leads to what outcome?
Over-consumption at
How can government achieve socially optimal consumption of demerit goods?
How can government achieve socially optimal consumption of demerit goods?
Impose indirect tax = marginal external cost
What determines whether a good is classified as merit or demerit?
What determines whether a good is classified as merit or demerit?
Value judgements of the classifier