1. Value judgements often have to made. Usually by government - assumption is made that these organisations know better than individuals what is good or bad for them. Are all?
- Problems when considering whether certain goods are merit or demerit goods
- Characteristics neccesary when considering whether a good is merit or demerit.
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Other questions in this quiz
2. What are externalities ?
- Externalitites occur when the marginal private cost is higher the marginal social cost.
- Externalities occur when a third party is affected by the economic decisions of others.
- Externalities occur when a first party is affected by the economic decisions of others
3. If only the private costs/benefits were reflected in the price of the product then it would not accurately reflect the true cost, therefore it will lead to either over or under production.
4. Education and health are examples are?
- Merit goods
- Demerit goods
5. Demerit goods, have ______ externalities arising out of their use