what is formed when youths develop a full sense of themselves based on a combination of their own self-perception and how they fit in with others?

Answer: Ego is formed

Explanation:

When a youth comes to the realization of himself and what he or she is capable of, Ego is formed.

This has merits and demerits, as for the merits the youth would be independent and would be able to solve problems with much confidence, the disadvantage is the youth could be proud and might not be submissive to some persons. So, there should be a limit to how they use this realization.