Friday, March 28, 2008

UNit 2: Actions to decrease consumption of demerit goods

This BBC clip explains that crisps, chocolate and sugary drinks are to be removed from vending machines in Welsh NHS hospitals.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7310000/newsid_7312900?redirect=7312910.stm&news=1&nbwm=1&bbram=1&nbram=1&bbwm=1 >

a) Why are such food items regarded as examples of demerit goods?
b) Explain how this action should reduce the market failure
c) To what extent do you believe this action will reduce the market failure?

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