Types Of Goods

Question 1

What is a free good?

Answer 1

A good that can be used at zero opportunity cost because it’s in limited supply.

Question 2

What is a public good?

Answer 2

A good that is typically provided by the government and when used by one person the usage of that good will not diminish in quality or quantity.

Question 3

What is a private good?

Answer 3

Scarce resources with an opportunity cost of consumption.

Question 4

What is a merit good?

Answer 4

A good that brings unanticipated and unappreciated benefits to consumers such that it’s under-consumed in a free market.

Question 5

What are demerit goods?

Answer 5

A good that brings less benefit to the consumer than they expect, such that too much will be consumed by individuals in a free market.

Question 6

Who usually provides private goods?

Answer 6

The private sector.

Question 7

Who usually provides free goods?

Answer 7

Free goods are typically naturally occurring.

Question 8

Who usually provides public goods?

Answer 8

The public sector.

Question 9

Who usually provides merit goods?

Answer 9

Both the private and the public sector.

Question 10

Who usually provides demerit goods?

Answer 10

The private sector.

Question 11

How large are the external costs and benefits for private goods?

Answer 11

Small.

Question 12

How large are the external costs and benefits for free goods?

Answer 12

There are no external costs and benefits.

Question 13

How large are the external costs and benefits for public goods?

Answer 13

There are larger external benefits.

Question 14

How large are the external costs and benefits for merit goods?

Answer 14

There are larger external benefits than external costs.

Question 15

How large are the external costs and benefits for demerit goods?

Answer 15

There are more external costs than there are external benefits.

Question 16

Is there an information failure for private goods?

Answer 16

No.

Question 17

Is there an information failure for free goods?

Answer 17

No.

Question 18

Is there an information failure for public goods?

Answer 18

No.

Question 19

Is there an information failure for merit goods?

Answer 19

Yes.

Question 20

Is there an information failure for demerit goods?

Answer 20

Yes.

Question 21

Are government actions taken for private goods?

Answer 21

There are no government actions taken.

Question 22

Are government actions taken for free goods?

Answer 22

There are no actions taken on free goods.

Question 23

Are government actions taken for public goods?

Answer 23

Yes, there is government provision.

Question 24

Are government actions taken for merit goods?

Answer 24

Yes there are government controls, direct provision and legislation.

Question 25

Are government actions taken for demerit goods?

Answer 25

Yes, there are government controls put in place to encourage less consumption.

Question 26

Give an example for private goods.

Answer 26

Almost anything.

Question 27

Give an example for free goods.

Answer 27

Anything in unlimited supply, air, sunlight, etc.

Question 28

Give an example for public goods.

Answer 28

Things provided by the public sector that are non-excludable and non-rivalrous, street lamps. Health care isn’t a example because it is a quasi-public good.

Question 29

Give an example for merit goods.

Answer 29

Anything that is under consumed and is good for people, healthcare and education.

Question 30

Give an example for demerit goods.

Answer 30

Anything that is over consumed and is bad for the general public e.g cigarettes, junk food, etc.

Question 31

Are private goods non-rivalrous?

Answer 31

No.

Question 32

Are free goods non-rivalrous?

Answer 32

Yes.

Question 33

Are public goods non-rivalrous?

Answer 33

Yes.

Question 34

Are merit goods non-rivalrous?

Answer 34

No.

Question 35

Are demerit goods non-rivalrous?

Answer 35

No.

Question 36

Are private goods non-excludable?

Answer 36

No.

Question 37

Are free goods non-excludable?

Answer 37

Yes.

Question 38

Are public goods non-excludable?

Answer 38

Yes.

Question 39

Are merit goods non-excludable?

Answer 39

No.

Question 40

Are demerit goods non-excludable?

Answer 40

No.

Question 41

Do private goods have a marginal cost of zero?

Answer 41

No.

Question 42

Do free goods have a marginal cost of zero?

Answer 42

Yes.

Question 43

Do public goods have a marginal cost of zero?

Answer 43

Yes.

Question 44

Do merit goods have a marginal cost of zero?

Answer 44

No.

Question 45

Do demerit goods have a marginal cost of zero?

Answer 45

No.

Question 46

What is the private sector?

Answer 46

The part of the national economy that is not under direct state control.

Question 47

What is the public sector?

Answer 47

The part of an economy that is controlled by the state.