Creado por Matthew Battell
hace casi 3 años
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Pregunta | Respuesta |
Merit Goods | A merit good is a good in which consumption results in positive externalities onto a third party. There are two characteristics of a merit good - People do not realise the true benefit (underestimating benefits of education) -These goods have positive externalities Therefore in a free market these goods are underconsumed. Examples Healthcare Museums Fruit and Veg Education |
Merit goods diagram | |
Demerit goods | A demerit good is a good in which consumption results on negative externalities on a third party . A demerit good has two characteristics - A good which harms the consumer E.g Cigarettes, drugs -Usually these goods have negative externalities e.g smoking creates passive smoking Therefore in a free market these goods will be overconsumed Examples Smoking Drinking Taking drugs Drinking sugary softdrinks |
Demerit goods diagram |
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Demerit Good (image/jpeg)
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