AQA A Level · 7136 · Paper 1: Markets and market failure
4.1.8.5 Merit and Demerit Goods
Also AQA AS 7135: 3.1.5.5
Everything you need for questions on merit and demerit goods, in the words examiners reward. An interactive seven-step lesson goes with it.
What's on this sheet
- What are merit and demerit goods?
- Why the free market gets it wrong
- Merit and demerit goods on a diagram
- Calculations
- What governments do (more in 4.1.8.9)
- Merit good or public good?
- Classic question: should the government decide what people consume?
- Side 2: practice tasks, where the marks go, and exam-style questions
- Separate answer key
The lesson in seven steps
- Why do people buy too little, or too much?
- Can the government hit Q*?
- Merit, demerit, or neither?
- Welfare loss and the gap to Q*
- Who decides what is good for us?
- Build the chain
- Exam practice
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