Classification of Goods and Services

Question 1

Definition of Free Goods

Answer 1

goods that are not scarce and have zero opportunity cost

Question 1

Definition of Private Goods

Answer 1

goods that are consumed by one person and not available to anyone else

Question 2

Definition of Public Good

Answer 2

a good that is non-excludable and non-rival

Question 3

Definition of Quasi-Public Good

Answer 3

good that has some but not the full characteristics of a public good

Question 4

Definition of Merit Good

Answer 4

a good that is thought to be desirable by consumers but which is underprovided by the market because of information failure

Question 5

Definition of Demerit Good

Answer 5

a good that is thought to be undesirable for consumers and is over provided by the market because of information failure

Question 6

Definition of Information Failure

Answer 6

a situation where consumers do not have full or complete information when making decisions