what can the government do to encourage merit goods course hero

What can the government do to promote merit good?

The government could also use regulation to enforce the consumption of a good provided by the private sector which is deemed to be a merit good by virtue of the positive externalities that it generates: the compulsory consumption of seat-belts by motorists provides one such example.

How should the government respond to the under-provision of merit goods?

Possible government responses to the under-provision of merit goods. direct provision of goods and services. In practice, governments play a substantial role in the provision of merit goods such as health and education, even where they are ideologically committed, as the Republicans are, to market forces.

What is an example of a merit good?

Subsidies may be used to increase the production and consumption of merit goods. For example, the theatre is usually provided by the private sector, and is often regarded as a merit good on account of the educative and civilising benefits that it confers on society.

Why does the government regulate goods and services?

The government may also use a range of regulations both to increase the consumption of merit goods and to ensure good quality provision.

Possible government responses to the under-provision of merit goods

Syllabus: Evaluate, using diagrams, the use of government responses including:

Subsidies

Subsidies may be used to increase the production and consumption of merit goods.