T8 - merit and demerit goods - ***GRAPS

Question 1

What si a maerit good

Answer 1

A godo where MSB of consumptions > PB

Question 2

WHat do merti goods cause

Answer 2

Positive externalities

Question 3

Characteristics of merit goods

Answer 3

Lack of information on it
Produce a positive extenrality in conusmption

Question 4

Who are merit goods provide by

Answer 4

State and private sector

Question 5

Are merit goods high in OC

Answer 5

YEs as they are limited in supply

Question 6

Are merit goods rivalrous

Answer 6

Can be yes

Question 7

Are merit goods excludeabel

Answer 7

Yes - health care, educations

Question 8

Are merit goods rejectable

Answer 8

Yes by those not willign to pay for the service or good

Question 9

Why does the gov provide merit goods

Answer 9

To overcome info failirue
To increase PE
So it is equitabel in its provision

Question 10

What are demerit goods

Answer 10

A good whichhas a negative impact on the ocnusmer, but the impacts are unkown and has negatiev externalities

Question 11

What does consumpiton of demerit goods lead to

Answer 11

NE

Question 12

What si higher for demerit goods, MSC or PC

Answer 12

MSC>MPC

Question 13

How may teh gov intervene on demerit goods

Answer 13

Regulation
Taxes

Question 14

What can gov regualtion fo demrit goods do

Answer 14

illegal markets
not much, cant tackel addcition with taxes

Question 15

just because a good produces negatiev externaltities is it a demrit good

Answer 15

no, for exampels cars make pullution btu arent bad for you

Question 16

why can it be argued the wrogn cosnumption fo merit/demrit goods can be caused by inofmration ratehr than the geenration of externalities

Answer 16

as people dotn recognise the logn term benefits, and only see the short term costs leadign to udnercosnumption