Lesson Plan

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Lesson Plan
Grade: Date: 18/01/2026
Subject: Economics
Lesson Topic: addressing the over-consumption of demerit goods and the under-consumption of merit goods
Learning Objective/s:
  • Describe the difference between demerit and merit goods and why they create market failure.
  • Explain how negative and positive externalities lead to over‑consumption of demerit goods and under‑consumption of merit goods.
  • Analyse at least three government policy tools (taxes, subsidies, regulation, provision) and predict their impact on quantity and welfare.
  • Evaluate potential unintended consequences of intervention, including equity and budgetary considerations.
Materials Needed:
  • Projector and screen for diagrams
  • Whiteboard and markers
  • Handout with summary tables and diagram templates
  • Worksheets for group analysis of policy tools
  • Laptop with internet access for a short video on behavioural biases
 Introduction:
Begin with a quick poll: “Which products do you think the government should limit or promote?” Connect responses to prior knowledge of externalities. Explain that today’s success criteria are to identify why demerit goods are over‑consumed, why merit goods are under‑consumed, and to match appropriate policy tools to each case.
Lesson Structure:
  1. Do‑now (5’) – Students list examples of demerit and merit goods on sticky notes.
  2. Mini‑lecture (10’) – Define demerit/merit goods, externalities, and market failure using projected diagrams.
  3. Guided analysis (15’) – In pairs, examine the comparative table and complete a worksheet matching policy tools to goods, justifying the economic mechanism.
  4. Whole‑class discussion (10’) – Groups present their matches; teacher highlights correct reasoning and common misconceptions.
  5. Case‑study simulation (15’) – Role‑play a government committee deciding on a sin tax for tobacco and a subsidy for vaccinations; record expected quantity changes.
  6. Check for understanding (5’) – Quick exit quiz (3 multiple‑choice questions) on key concepts.
Conclusion:
Summarise that government intervention aims to align private incentives with social welfare by correcting externalities and information gaps. Ask students to write one key takeaway on an exit ticket and indicate which policy they think is most effective for a chosen good. Assign homework to research a real‑world example of a merit‑good subsidy and prepare a brief summary.