Q. Among the Environment protection, flood control, fertilizers and diesel which can be classified as “merit goods’ for the purpose of subsidies?
Answer: environment protection and flood control only
Notes: The correct answer is "environment protection and flood control only." Merit goods are those that are deemed beneficial for society and are often under-consumed if left to the free market. Environment protection and flood control are essential for public welfare, reducing disaster risks, and maintaining ecological balance. Fertilizers, while important for agriculture, do not fit the merit goods category as their consumption can lead to negative externalities like soil degradation and water pollution. Subsidizing merit goods encourages their use and promotes overall societal benefits.

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