Merit Goods, Public Goods, Demerit Goods Flashcards Preview

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Flashcards in Merit Goods, Public Goods, Demerit Goods Deck (21)
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1

merit goods

those that create positive spillover benefits

2

Are merit goods under or over produced by the free market?

under

3

What is the degree of government provision or encouragement of a merit good related to?

directly to amount of spillover benefits provided by good

4

public goods

non-excludable and non-rivalrous

5

examples of public goods

steetlights, prisons, roads

6

non-rivalrous

if one person's consumption does not prevent others from enjoying it

7

non-excludable

if the producer cannot prevent particular individuals from enjoying its benefits e.g. streetlights

8

What must a good be to be public?

non-rivalrous and non-excludable

9

demerit goods

those that create negative spillover costs to third parties

10

Are demerit goods over or underproduced?

over because negative effect on society e.g. cigarettes

11

private goods

must be purchased in order to be consumed, and consumption by one individual prevents another individual from consuming it

12

common goods

rivalrous and non-excludable

13

tragedy of the commons

dilemma posed when common resources are used rapidly by private individuals who enjoy short-term benefit without understanding long-term depletion

14

collective goods

non-rivalrous and excludable

15

private good examples

clothing, electronics

16

common good examples

fish, air

17

collective good examples

movie theatre, internet websites

18

public good examples

lighthouses, national defence

19

solution for public goods

government provision
subsidies

20

solutions for merit goods

government provision
subsidies

21

solutions for common goods

government ownership
private property