Classification of good and services Flashcards
What are merit goods?
A merit good is a good which when consumed provides external benefits although these may not be fully recognised.
What are demerit goods?
They are goods which are harmful to consumers than they themselves realise and they generate external costs.
What are private goods?
These are goods which are bought and consumed by individuals for their own benefit.
What are public goods?
Public goods have the characteristics of non excludability and non rivalry.
What are pure public goods ?
These are 100 percent non rivalry and non excludable.
What does non excludable mean?
It means that goods produced for one party can be consumed by others without having to pay for those goods. Ex Street lights.
What are non rivalry goods?
Consumption by one person does not reduce the availability of a good to others.
What is the free rider problem?
It recognises that the benefits gained from the production and consumption of public goods could not be limited to those who had paid for it, if a price has not been charged for the product , it will be impossible to exclude who are not willing to pay.
What are quasi?near public goods?
Quasi-public goods have characteristics of both private and public goods, including partial excludability, partial rivalry. Ex Libraries, Bridges, Public park
What are Giffen goods?
In economics and consumer theory, a Giffen good is a product that people consume more of as the price rises and vice versa—violating the basic law of demand in microeconomics.
What are inferior goods?
An inferior good is a good whose demand decreases when consumer income rises, unlike normal goods, for which the opposite is observed
