Questions

1. What are the differences between private external and social benefits?

2. What are public goods?

3. What are the differences between merit and demerit goods?

4. What are the social benefits of public provision of education?

   
   

Answers

1. Private benefits are the benefits attained by a private firm, external benefit is the extra benefit of the third part in a private transaction, social benefit is the benefit of society when private benefit and external benefit combines and becomes as whole

2. Public goods are goods provided by the government to the people, these kind of goods help the people in their daily life and these type of goods are not provided by the private firms cause they have no profit from supplying these type of goods. For example - Street lights, public library and etc

3. Merit goods are goods that give good to the society but are supplied less and the poor can't afford, for example : school, house and etc. Demerit goods are goods which are bad for the society and they are inelastic products, for example- cigarettes

4. It can the make the society literate and can provide knowledge to many, Thats the social benefit of education

Mixed Economy System

1. Mixed economy system is a economy system of both planned economy and market economy

2. In a mixed economy the degree of involvement of private and public sectors are decided by the government