Unit 1 - Chapter 11 Flashcards
Merit goods and demerit goods
1
Q
Demerit good
A
A good, for which the social costs of consumption exceed the private costs. E.G. tobacco
2
Q
Merit good
A
A good, for which the social benefits of consumption exceed the private benefits. E.G. healthcare.
3
Q
An information problem
A
Occurs when people make wrong decisions because they don’t possess or they ignore relevant information.
4
Q
Normative statement
A
A statement of opinion based on a value judgement.
5
Q
Positive statement
A
A statement of fact, or one that can be scientifically tested.
