Question

With the use of examples, distinguish carefully between merit and de-merit goods and describe the difference between positive and negative externalities.
Word Limit: 300 words

Answer 1

Merit good are benifit un all Dimesion to the society and they make people life easy to live .these are also give burden on people but in positive sense as they may give harm to Society or government in short run, but very good in long term advantage.

Example:education, health, etc.

Demerits goods : goods which are harmful for society in every sphere of it. These are negative externalities. These are burden on society ,government in negative sense as these cost are harmful for everyone in the form of disease, abuse, environmental pollution, waste of money .

Example : alcohol ,ciggarette, drugs etc.

Positive externalities:if consumption And production of goods and services gives benifit to third party or Everyone in each dimension . Like education is give benifit for everyone in the society in different form  

Negative externalities : these are goods and services production and consumption which harm everyone or third party also in each dimension. Cigarette is give harm as user or non user in the form waste of money and pollution . Which create different problem.