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CAIE A-Level Economics AS 1.6 Classification of Goods and Services Questions

Practise classifying free, private, public, merit and demerit goods through scarcity, rivalry, excludability and information failure, then connecting each type to allocation…

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • classify goods using scarcity, rivalry and excludability rather than relying on who supplies them
  • explain free-rider and non-excludability problems when markets provide public goods
  • link information failure to under-consumption of merit goods or over-consumption of demerit goods

Covered syllabus points

1.6.1—Free and private goods1.6.2—Public goods1.6.3—Merit goods1.6.4—Demerit goods

Question 1

[Maximum number: 1]

Which activity illustrates the consumption of a 'free' good?

A

a farmer using water taken from a river

B

a patient visiting a medical facility provided by a charity

C

a person breathing air in the countryside

D

a person eating their birthday cake given as a gift by a friend

Question 2

[Maximum number: 1]

Consumers do not use enough of a product to maximise their private benefit because they have imperfect information about the product.

How would an economist classify this product?

A

demerit good

B

free good

C

merit good

D

public good

Question 3

[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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