Goods or services whose consumption is believed to confer benefits on society as a whole greater than those reflected in consumers' own preferences for them. This implies that they have beneficial external effects, presumably by making the consumers better or more productive people. Merit goods are therefore sometimes subsidized by the government, and sometimes provided by charities. In some cases plausible mechanisms for beneficial externality can be suggested: well educated people are more likely to be employed, and well housed people may be less likely to become criminals. In other cases, however, it is hard to think of any plausible mechanism by which such externalities could arise: how, for example, does watching grand opera make people better citizens?

• kurtosis
• Kyoto Protocol
• labour
• labour-capital ratio
• labour economics
• labour force
• labour hoarding
• labour-intensity
• labour market
• labour mobility
• labour productivity
• labour standards
• labour supply
• labour theory of value
• labour turnover
• Laffer curve
• Lagrange multiplier
• lags
• laissez-faire
• land
• landlord
• land use planning
• Laspeyres index
• last-in, first-out
• last resort, lender of