O-LevelEconomicsThe allocation of resources2281/11 · May/June 2024 · Q91 Mark

What is a correct definition of a demerit good?

Agood which generates external benefits

Bgood with higher private costs than social costs

Cgood which is more harmful to consumers than they realise

Dgood which provides no costs to third parties

✓ Correct answer

C: good which is more harmful to consumers than they realise

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2024 Paper 1 Variant 1, question 9.

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