Merit and demerit goods

Question 1

define merit goods

Answer 1

goods which areunder-consumedbecause of eitherpositive externalities orinformation gap

Question 2

define demerit goods

Answer 2

goods which areover-consumedbecause of eithernegativeexternalities orinformation gap.

Question 3

what type of judgement does Deciding whether a good is a merit good or demerit good require us to Mae

Answer 3

requires us to make avalue judgement - a normativedecision