Economics 9708 · AS & A Level · Behavioural economics
Using examples, explain the distinction between merit goods and public goods and show why profit can be earned from supplying one of these types of good but not the other.
Discuss why merit goods are undersupplied in a free market economy and assess how effective one policy is in dealing with this problem.
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Accurate definition of merit goods in terms of under-consumption through information failure (accept positive externalities), together with an appropriate example. No example or an incorrect example, 1 maximum” …