Classification of goods and services: แบบฝึกหัด

Which combination of characteristics correctly describes a street light provided by the government?

Which statement best explains why a merit good, such as a preventive vaccination, is typically under-consumed in a free market economy?

Why does a market economy typically under-provide merit goods such as vaccinations and education?

What are the two defining characteristics of a pure public good?

A good is characterized by non-excludability and non-rivalry in consumption. Another good is provided by the state because individuals, due to imperfect information, fail to realize the full private benefits of consuming it.
What is the correct classification for these two goods respectively?

Define a free good and explain why its consumption does not involve an opportunity cost.

Distinguish between merit goods and private goods by specifically analyzing how information failure leads to a difference between their actual consumption levels and their socially optimal levels.

Explain how imperfect information leads to the under-consumption of merit goods in a market economy.

(a) Define the terms merit goods and demerit goods.
(b) Explain why merit goods are typically under-consumed in a free market economy due to information failure.
(c) Provide one specific example of a merit good and one example of a demerit good.

(a) Distinguish between public goods and private goods by analyzing the characteristics of excludability and rivalry.
(b) Discuss the extent to which the 'free-rider problem' results in the total non-provision of public goods in a pure market system, and explain how a government can resolve this market failure.