Asked by AbasEconomics πŸ“ˆ

What is the difference between a demerit and a merit good?

Profile picture

Will Frankfurt

I love learning and making complex things easy to understand.

A merit good has two characteristics: 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. A demerit good has two characteristics: 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.

Will also answered

Asked in Economics πŸ“ˆ

ASKED BY LAURA

ECONOMICS πŸ“ˆ

Can you help by explaining to me the basic on poor housing and inequality of opportunity?

I'll be as brief as I can Laura! Firstly, I need to know what you mean by poor housing. Does it mean: 1. Poor quality housing 2. Housing with reside...

ASKED BY SELINA

ECONOMICS πŸ“ˆ

What is economies of scale? And how does it impact cost?

Scale economies have brought down the unit costs of production and have fed through to lower prices for consumers. Most firms find that, as their pr...

ASKED BY DUAFATEMA

ECONOMICS πŸ“ˆ

1Using income elasticity of demand explain the reasons for the increase in profits during the recession for businesses like Aldi, Lidl etc?

Income elasticity of demand refers to the responsiveness of a demand for a product to a change in income. Sometimes demand for some products rise wh...

ASKED BY IFEANYICHUKWU

ECONOMICS πŸ“ˆ

What are the determinants of aggregate demand in the short and long run?

In the short run: Consumption+Investment+Government Spending+Net Exports These are the same in the long run, the difference between the short run an...

ASKED BY LAURA

ECONOMICS πŸ“ˆ

Can you please explain the basics on poor housing and inequality of opportunity for economics????

I'll be as brief as I can Laura! Firstly, I need to know what you mean by poor housing. Does it mean: 1. Poor quality housing 2. Housing with reside...

ASKED BY BONNIE

ECONOMICS πŸ“ˆ

What are health care services?

Health care services relate to bodies, organisations and facilities which are set up to take care of your health. For example, basic health care ser...

ASKED BY VALENTINE

ECONOMICS πŸ“ˆ

Explain supply and demand please?

Demand is the willingness to purchase a given good or service at a particular price at a given time. Supply is the willingness of manufacturers to s...

ASKED BY KAT

ECONOMICS πŸ“ˆ

Why has the US trade deficit narrowed recently ?

The US trade deficit actually recently recorded its first rise in four months. Prior to this, the narrowing largely should stemmed from increases in...

ASKED BY INES

ECONOMICS πŸ“ˆ

What is GDP and GNI?

GDP or Gross Domestic Product is one of the most widely used measures of an economy’s output. πŸ“ˆ It could be defined as β€œthe total value of goods an...

ASKED BY JACKSON

ECONOMICS πŸ“ˆ

How interest rates affect market participants?

Interest rates are very important in our economy, first thing first, interest rates refers to the cost of borrowing. Now in terms of consumers, if t...

Find me a tutor

We take your privacy seriously. View our policy.