Lesson Plan

• Describe the nature and definition of merit goods.
• Explain how imperfect information causes under‑consumption of merit goods.
• Analyse the welfare impact using social and private marginal benefit concepts.
• Evaluate two government interventions that can correct this market failure.
• Apply the merit‑goods diagram to a real‑world example.

• Projector and screen
• Whiteboard and markers
• Handout with merit‑goods characteristics and diagram
• Calculator or spreadsheet (optional)
• Sticky notes for group activity

Begin with a quick poll: “What services do you think the government should provide for free?” Use responses to highlight goods that generate extra social benefits. Recall previous lessons on externalities and ask students to predict why some beneficial goods might be bought less than they should. Success criteria: students will be able to define merit goods, explain under‑consumption, and suggest corrective policies.

1. Do‑now (5'): Students list examples of merit goods on sticky notes; share briefly.
2. Mini‑lecture (10'): Definition, characteristics, and the role of imperfect information.
3. Diagram demonstration (8'): Show SMB vs. PMB curves and explain the welfare gap.
4. Group case study (15'): Teams analyse a real‑world example (e.g., vaccinations) and calculate the under‑consumption gap.
5. Whole‑class discussion (7'): Groups present findings; teacher highlights government interventions.
6. Exit ticket (5'): One‑sentence answer to “Why do merit goods need government support?”

Summarise that merit goods are under‑consumed because consumers lack full information, creating a gap between private and social benefits. Collect exit tickets and remind students that the homework is to write a short paragraph evaluating the effectiveness of a subsidy versus an information campaign for a chosen merit good.