1
Q
What is a merit good?
A
A good that is underconsumed in a free market but beneficial for society.
2
Q
Examples of merit goods?
A
Education healthcare vaccinations.
3
Q
Why are merit goods underconsumed?
A
Consumers underestimate the benefits.
4
Q
What is a demerit good?
A
A good that is overconsumed and harmful to society.
5
Q
Examples of demerit goods?
A
Alcohol cigarettes gambling.
6
Q
Why are demerit goods overconsumed?
A
Consumers underestimate the harm.
7
Q
How can governments increase consumption of merit goods?
A
Subsidies and public provision.
8
Q
How can governments reduce consumption of demerit goods?
A
Taxes regulation and advertising restrictions.
Microeconomics Ocr a-level
flashcards
Decks in class (14)
# Cards
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1.1 The Economic Problem25
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1.2 The Allocation Of Resources9
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1.3 Opportunity Cost14
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2.1 Specialisation and Trade9
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2.2 Demand14
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2.3 Supply10
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2.4 Consumer And Producer Surplus13
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2.5 The Interaction Of Markets8
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2.6 Elasticity17
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2.7 The Concept Of The Margin16
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2.8 Market Failure And Externalities23
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2.9 Information Failure8
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2.10 Public Goods8
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2.11 Government Intervention16
