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CAIE A-Level Economics AS 1.6.4 Demerit Goods Questions

Practise explaining why demerit goods are over-consumed under imperfect information, their negative externalities and possible government interventions.

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • Explain demerit goods as private goods that are over-consumed because of imperfect information and generate negative externalities, and evaluate appropriate interventions.

CAIE A-Level Economics AS 1.6.4 Demerit Goods Questions question 1

[Maximum number: 1]

Some goods are over-consumed in a market economy.
What is likely to be the cause of this?

A

Consumer surplus exceeds producer surplus.

B

Consumers undervalue the benefits of consuming the goods.

C

There is excess supply in the market for the goods.

D

There is imperfect information in the market.

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