Doug knows that getting a flu shot may benefit others. However, he rarely gets sick, so getting the flu shot would cost him more than the benefit he would get. Doug makes his decision based on the:
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Step 1
Step 1: Identify the key elements in Doug's decision — he recognizes that getting a flu shot benefits others (positive externality), but personally, he rarely gets sick. Show more…
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The market for seasonal flu shots is depicted in the graph. As more people receive flu shots, fewer people catch the flu and there are fewer people to pass the flu along to others. Therefore, the chance of catching the flu decreases for everyone, even private marginal benefits, and the supply curve measures the marginal cost of flu shots. The demand curve ignores external benefits of flu shots. Graph the social demand curve by placing the end points of the marginal social benefit curve at the correct locations. Then, shade the deadweight loss to society by placing the DWL triangle in the correct location. The Market for Flu Vaccinations Marginal social benefit DWL Supply ($) 0 Marginal private benefit Quantity of flu shots Based on the graph, which statement about flu vaccines is true? A. The marginal private benefit of vaccines is higher at the optimal quantity than at the market quantity. B. More people will get vaccinated when only private costs and benefits are considered because the price is lower. C. Vaccines are more valuable to society than private markets indicate, so the market output will be lower than the optimal level. D. People who get vaccinated primarily consider the health benefits to the rest of society.
Farruh T.
a. Determine whether children getting a flu vaccine carries an external benefit or an external cost. If an external cost is present, move point A and point B to show the marginal social cost curve. If an external benefit is present, move point A and point B to show the marginal social benefit curve. Place point C at the equilibrium outcome. Place point D at the socially optimal outcome. Flu vaccines B C D Supply (marginal private cost) Price Demand (marginal private benefit) Quantity
Crystal W.
Vaccinations help protect the unvaccinated from disease. Boulier et al. (2007) found that the marginal externality effect can be greater than one case of illness prevented among the unvaccinated. Is vaccination a public good? If so, what might the government do to protect society optimally?
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