ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -role of government budget The concept of merit goods assists governments in deciding which public or other goods should be supplied. Merit goods are commodities that the public sector provides free or cheaply because the government wishes to encourage their consumption.

Detailed explanation-2: -A merit good has two characteristics: People do not realise the true personal benefit. For example, people underestimate the benefit of education or getting a vaccination. Usually, these goods also have a positive externality.

Detailed explanation-3: -Examples of merit goods include education, health care, welfare services, housing, fire protection, refuse collection and public parks.

Detailed explanation-4: -Merit goods: are those public goods which results in interference with consumer choices. Here the government will be providing the goods (merit) to specific section of the society because of their backward status, poverty etc (depending on their merit).