Merit Goods Are Those Which, When Consumed, Generate Positive External

question 53

Multiple Choice

Merit goods are those which, when consumed, generate positive external benefits. This is likely to mean that, in a free market economy, the good will be:

• A)Over-consumed.
• B)Over-supplied.
• C)Subject to VAT.
• D)Under-supplied.

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Definitions:

Insects

Small arthropod animals characterized by three parts body segmentation, compound eyes, and one pair of antennae, comprising the largest biodiversity.

Ecology

The field of biology concerned with how organisms interact with each other and their environment.

Organisms

Any form of life, ranging from microscopic entities like bacteria to complex multicellular beings such as humans and trees.

Nonliving Environment

All the abiotic components in an ecosystem, including minerals, water, sunlight, and atmospheric gases, which affect living organisms.