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CAIE A-Level Economics AS 3.1.2 Merit and Demerit Goods Questions

Practise explaining imperfect information, under-consumption and over-consumption, and evaluating taxes, subsidies and information policies for merit and demerit goods.

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • Explain imperfect information in merit and demerit goods, analyse under- and over-consumption, and evaluate taxes, subsidies and information policies.

CAIE A-Level Economics AS 3.1.2 Merit and Demerit Goods Questions question 1

[Maximum number: 1]

Which combination of government measures is most likely to increase the consumption of a merit good?

A

setting an effective maximum price on the product and paying producers a subsidy

B

setting an effective maximum price on the product and imposing an indirect tax on producers

C

setting an effective minimum price on the product and paying producers a subsidy

D

setting an effective minimum price on the product and imposing an indirect tax on producers

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