Classification of goods and services
1.6What the syllabus asks of you
- nature and definition of free goods and private goods (economic goods)
- nature and definition of public goods
- nature and definition of merit goods: under-consumption as a result of imperfect information in the market
- nature and definition of demerit goods: over-consumption as a result of imperfect information in the market
Drill this topic
Every question on Classification of goods and services, untimed, marked as you go.
Make a worksheet
Choose the years and how many questions, then print it with the answers on separate pages.
52 questions
1May / June 2026 · Paper 11 · Q2Show mark scheme →
Anegative / over-consumed
Bnegative / under-consumed
Cpositive / over-consumed
Dpositive / under-consumed
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2May / June 2026 · Paper 12 · Q1Show mark scheme →
Aa demerit good
Ba free good
Ca merit good
Da public good
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3May / June 2026 · Paper 13 · Q4Show mark scheme →
APeople who pay for education value it more than those who cannot pay.
BPrivate schools have more merit than state schools.
CCosts of providing education outweigh benefits of education.
DSome consumers do not fully recognise the value of education.
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4May / June 2026 · Paper 13 · Q21Show mark scheme →
AAll healthcare is too expensive.
BHealthcare is non-excludable.
CHealthcare is non-rival.
DHealthcare is underconsumed.
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5May / June 2026 · Paper 14 · Q2Show mark scheme →
Alimited supply of a free good; no opportunity cost of a free good
Blimited supply of a free good; yes opportunity cost of a free good
Cunlimited supply of a free good; no opportunity cost of a free good
Dunlimited supply of a free good; yes opportunity cost of a free good
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6May / June 2026 · Paper 14 · Q13Show mark scheme →
Abuy one get one free promotions leaving supermarket shelves empty
Bfree goods such as the sea being polluted by discarded plastics
Chouseholds who enjoy the benefits of defence without paying for it
Dlong queues for treatment caused by free medical care
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7Oct / Nov 2025 · Paper 11 · Q4Show mark scheme →
AA ferry that takes members of the public across a river.
BA fish farm that is owned by the government.
CA fishing boat that is owned by all members of a village.
DA lighthouse that warns boats of dangerous rocks.
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8Oct / Nov 2025 · Paper 11 · Q5Show mark scheme →
Ahigh level of imperfect information among consumers; yes subsidy received by producers
Bhigh level of imperfect information among consumers; no subsidy received by producers
Clow level of imperfect information among consumers; yes subsidy received by producers
Dlow level of imperfect information among consumers; no subsidy received by producers
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9Oct / Nov 2025 · Paper 12 · Q2Show mark scheme →
Aa former nationalised rail network which has been privatised
Ba good that has an opportunity cost
Cthe building of a new toll road which charges all users the same toll
Dthe provision of street lighting which improves a locality
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10Oct / Nov 2025 · Paper 13 · Q6Show mark scheme →
Acomplementary good
Bmerit good
Cprivate good
Dpublic good
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11Oct / Nov 2025 · Paper 14 · Q1Show mark scheme →
Aone that has zero opportunity cost
Bone that is non-excludable and non-rivalrous
Cone that is supplied by the government with no charge
Done that receives a 100% government subsidy
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12Oct / Nov 2025 · Paper 14 · Q11Show mark scheme →
AHouseholds cannot accurately value the benefits of a good.
BHouseholds cannot be excluded from consuming the good.
CThe amount of the good available diminishes as households consume it.
DHouseholds are rivals in the consumption of the good.
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13May / June 2025 · Paper 11 · Q5Show mark scheme →
AConsumers are dissatisfied with the performance of state-run services.
BNew technological developments make the good excludable.
CThe government privatises the industry producing the good.
DThe price of the good increases so it becomes more profitable.
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14May / June 2025 · Paper 12 · Q3Show mark scheme →
AIt is not possible to stop a non-payer from using the product.
BOne person consuming the product does not reduce the amount of it available to others.
CPeople consume too little of the product because they are unaware of its true benefits.
DThere is an unlimited supply of the product.
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15May / June 2025 · Paper 13 · Q1Show mark scheme →
Aa free good
Ban inferior good
Ca public good
Da private good
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16May / June 2025 · Paper 14 · Q5Show mark scheme →
AThe improved air quality also benefited those who did not have to pay for it.
BThe private costs and external costs were borne by the city authorities.
CThe stadium could be used after the championships.
DThe unemployed factory workers were entitled to free tickets to the stadium.
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17Oct / Nov 2024 · Paper 11 · Q3Show mark scheme →
AAddictive drugs are regarded as demerit goods because users are unaware of the full damage they do.
BAir is regarded as a free good because its use has no opportunity cost.
CNational defence is regarded as a public good because one citizen 'consuming' it reduces the amount of it available to others.
DVisits to a doctor are regarded as private goods partly because they are rival.
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18Oct / Nov 2024 · Paper 13 · Q2Show mark scheme →
Aeconomic good
Bfree good
Cmerit good
Dpublic good
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19May / June 2024 · Paper 11 · Q12Show mark scheme →
Aa free good
Ba public good
Ca demerit good
Da normal good
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20May / June 2024 · Paper 13 · Q1Show mark scheme →
Aeducation
Bflood control systems
Cnational defence
Dstreet lighting
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21May / June 2024 · Paper 13 · Q3Show mark scheme →
Aa farmer using water taken from a river
Ba patient visiting a medical facility provided by a charity
Ca person breathing air in the countryside
Da person eating their birthday cake given as a gift by a friend
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22Feb / March 2024 · Paper 12 · Q13Show mark scheme →
ATheir value is not fully understood by consumers.
BThey are unproductive goods and services.
CThey can only be provided by the government.
DThey are only provided by private sector businesses.
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23Oct / Nov 2023 · Paper 11 · Q3Show mark scheme →
Ademerit good
Bfree good
Cprivate good
Dpublic good
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24Oct / Nov 2023 · Paper 11 · Q14Show mark scheme →
AThe roads must be excludable.
BThe roads must be merit goods.
CThe roads must be non-rivalrous.
DThe roads must be public goods.
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25Oct / Nov 2023 · Paper 12 · Q3Show mark scheme →
Aa demerit good
Ba free good
Ca private good
Da public good
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26Oct / Nov 2023 · Paper 12 · Q6Show mark scheme →
AConsumer surplus exceeds producer surplus.
BConsumers undervalue the benefits of consuming the goods.
CThere is excess supply in the market for the goods.
DThere is imperfect information in the market.
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27Oct / Nov 2023 · Paper 13 · Q2Show mark scheme →
Ademerit good
Bfree good
Cmerit good
Dpublic good
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28Oct / Nov 2023 · Paper 13 · Q4Show mark scheme →
Aa government sponsoring a free vaccination programme for its citizens
Ba hospital providing free treatment to the poor
Ca school providing free education to outstanding students
Danything that provides free utility but is not scarce
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29May / June 2023 · Paper 13 · Q1Show mark scheme →
AFlowers in parks are a public good because people can enjoy them at no charge.
BFlowers in parks are a public good because they are owned by local people and are not for profit.
CFlowers in parks are not a public good if local people can limit the number of visitors to the parks.
DFlowers in parks are not a public good if they are individual, not identical, in nature.
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30May / June 2023 · Paper 31 · Q12Show mark scheme →
Adirect provision of the good by the government
Bprovision of detailed information to consumers
Csubsidising firms that currently produce the good
Dthe adoption of maximum price controls
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31May / June 2023 · Paper 33 · Q12Show mark scheme →
Adirect provision of the good by the government
Bprovision of detailed information to consumers
Csubsidising firms that currently produce the good
Dthe adoption of maximum price controls
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32Feb / March 2023 · Paper 12 · Q1Show mark scheme →
Aexcludable and non-rival.
Bexcludable and rival.
Cnon-excludable and non-rival.
Dnon-excludable and rival.
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33Feb / March 2023 · Paper 12 · Q13Show mark scheme →
AConsumers are afraid of having car accidents.
BConsumers are unable to afford bicycles.
CConsumers are not aware of the external benefits of using bicycles.
DConsumers ignore the external costs of using bicycles.
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34Oct / Nov 2022 · Paper 11 · Q2Show mark scheme →
ANo, because it is possible to exclude some people from using the tap.
BNo, because it requires the use of scarce resources.
CYes, because it is available to all passers-by.
DYes, because it is impossible to charge for it.
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35Oct / Nov 2022 · Paper 12 · Q3Show mark scheme →
Aan ice cream
Bstreet lighting
Ca radio broadcast
Dthe internet
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36Oct / Nov 2022 · Paper 13 · Q5Show mark scheme →
Abuilding the defences
Bdesigning the defences
Cfinancing the defences
Dmaintaining the defences
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37May / June 2022 · Paper 12 · Q18Show mark scheme →
Aconsumer non-excludability
Bimproved use of resources
Copportunity cost
Dreduction in tax
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38May / June 2022 · Paper 14 · Q1Show mark scheme →
AThere will be a reduction in the provision of a public good.
BAll consumers will receive better health care.
CMarket failure will be eliminated in the health care market.
DThe health care market will reach an equilibrium.
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39May / June 2022 · Paper 32 · Q4Show mark scheme →
ABetter knowledge of health hazards is changing behaviour.
BCigarette smoking will be replaced by cheaper alternatives.
CConsumer behaviour is irrational due to addiction.
DThe income effect of a price rise makes consumers worse off.
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40Feb / March 2022 · Paper 12 · Q9Show mark scheme →
Awhen the government removes all price controls
Bwhen the new preferences are for more public goods
Cwhen the supply of factors of production is limited
Dwhen there is a redistribution of income
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41Feb / March 2022 · Paper 12 · Q16Show mark scheme →
ALibraries are public goods.
BLibraries are merit goods.
CThe cost of providing library services would be greater in the private sector.
DThe opportunity cost to the public sector of providing library services is zero.
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42Oct / Nov 2021 · Paper 12 · Q3Show mark scheme →
Aflood defences
Bgovernment-funded hospitals
Cgovernment-run national parks
Dthe internet
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43Oct / Nov 2021 · Paper 13 · Q15Show mark scheme →
AOne person's consumption of a public good means it is not available for anyone else.
BPeople are able to consume public goods without paying for them.
CPrivate sector firms will charge a price significantly above cost for public goods.
DThe cost of producing public goods is higher in the private sector.
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44Oct / Nov 2021 · Paper 32 · Q2Show mark scheme →
Anegative externalities of consumption: no; negative externalities of production: yes; over-consumption of demerit goods: yes
Bnegative externalities of consumption: yes; negative externalities of production: yes; over-consumption of demerit goods: no
Cnegative externalities of consumption: yes; negative externalities of production: no; over-consumption of demerit goods: yes
Dnegative externalities of consumption: yes; negative externalities of production: no; over-consumption of demerit goods: no
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45Oct / Nov 2021 · Paper 33 · Q2Show mark scheme →
AProducers undervalue the benefits of a public good.
BPublic goods have high fixed costs of production.
CThe non-excludability of a public good leads to the free rider problem.
DWhen a public good is consumed by one person, it is not available to others.
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46May / June 2021 · Paper 11 · Q3Show mark scheme →
Ademerit
Binferior
Cmerit
Dpublic
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47May / June 2021 · Paper 11 · Q16Show mark scheme →
AThe supply of merit goods reduced.
BThe supply of merit goods increased.
CThe supply of private goods reduced.
DThe supply of public goods increased.
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48May / June 2021 · Paper 12 · Q1Show mark scheme →
Acamping and information | swimming and sightseeing
Binformation and swimming | sightseeing and camping
Csightseeing and camping | information and swimming
Dswimming and sightseeing | camping and information
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49May / June 2021 · Paper 12 · Q18Show mark scheme →
AIn a free market, consumers have imperfect information so do not realise the full personal benefit of education.
BIn a free market, education is not considered to be a private good.
CIn a free market, consumers will be unwilling to pay for education.
DIn a free market, education is non-rival and non-excludable in consumption so zero output would be produced.
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50May / June 2021 · Paper 13 · Q1Show mark scheme →
Afree good
Binferior good
Cprivate good
Dpublic good
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51May / June 2021 · Paper 13 · Q14Show mark scheme →
AThe consumption of these products may be beneficial.
BThe production of these products may be harmful.
CThe production of these products have high opportunity costs.
DThese products are non-rival in consumption and non-excludable.
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52Feb / March 2021 · Paper 12 · Q18Show mark scheme →
AIn a free market it is excludable and rival in consumption.
BIn a free market it is non-excludable and non-rival in consumption.
CThe government has perfect information, so it can set the correct quantity required.
DThe private sector firm would charge a high price for its use as it is a necessity.
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