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Characteristics of public, merit and demerit
Kaelin 10H
Ali 10C
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Characteristics of public, merit and demerit
Kaelin 10H
Ali 10C
Ananthicha 10E
Anjali 10E
Demerit
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Drinking – Health costs to drinkers. Costs to society include more expenditure on health care and policing.
Taking drugs – Health costs to drug users – people underestimate risks of getting addicted. External costs of more crime.
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People do not realise the true personal benefit. For example, people underestimate the benefit of education or getting a vaccination.
Usually, these goods also have a positive externality.
Therefore in a free market, there will be under consumption of merit goods.
Health Care – people underestimate the benefits of getting a vaccination. If people do get a vaccination, then there will be a personal benefit in protecting against diseases. Also, there will be external benefits to the rest of society because it will help reduce the prevalence of disease in the rest of society.
Museums – the educational benefit of museums are often overlooked by the people visiting it who view it as simply a form of entertainment.
Eating fruit and vegetables – A diet of raw fruit gives health benefits to the consumers but we may prefer unhealthy food due to preferences concerning taste.
Education – People may undervalue the benefits of studying, and decide to leave school early or not get good grades.
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A good which harms the consumer. For example, people don’t realise or ignore the costs of doing something e.g. smoking, drugs.
Usually, these goods also have negative externalities. If you smoke you harm yourself, but also the smoke negatively affects other people.
Therefore in a free market, there will be overconsumption of these goods.
A public good is a good whereby no individual can be excluded from benefiting from it. In other words, everyone can benefit from its use. This could come in the form of a government public good such as education, or a natural public good such as air.
A public good is a good that government provides which is both non-excludable and non-rivalrous and the free rider problem
Examples of public goods include – defence, policing, streelights, and lighthouses.
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