An individual chooses to get a vaccine to help protect themselves against a disease, which also helps prevent others in society from getting sick. Graphically demonstrate the vaccine consumption market. On your graph, label the supply curve, the demand/private benefit curve, the social benefit curve, the market equilibrium level of output, and the efficient level of output.

An individual chooses to get a vaccine to help protect themselves against a disease, which also helps prevent others in society from getting sick. Graphically demonstrate the vaccine consumption market. On your graph, label the supply curve, the demand/private benefit curve, the social benefit curve, the market equilibrium level of output, and the efficient level of output.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 2PA

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Historically, Vaccinations have prevented the spread of certain diseases such as chicken pox or megningtis. What type of externality takes place with the consumption of such vaccines. Explain with words and a graph.
Suppose that we have a model that estimates that taking the COVID-19 vaccine creates a positive externality to society that is at least equal to $1500 per vaccine. (Amazing, right? Well, remember that I made it up.) This means that for every person that takes the vaccine, the benefits to society will be $1500 or more. a. First, what factors do you think go into estimating the benefits of $1500 per vaccine. This is kind of a brainstorming question – but it is worth points so don’t skip it. b. What is the relationship between the equilibrium quantity of vaccines and the socially optimal quantity of vaccines?
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#9. A safe and effective coronavirus vaccine has positive externalities. Is it efficient for the government to provide this vaccine to everyone for free? a. Yes. Goods with positive externalities should always be free. b. Uncertain. Goods with positive externalities should be subsidized, but making them free is not necessarily efficient. c. No. According to the First Fundamental Welfare Theorem, the market will provide the efficient amount of vaccines on its own. с. d. No. Goods with positive externalities should be taxed.
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