Based on the graph, which statement about flu vaccines is true? People who get vaccinated primarily consider the health benefits to the rest of society. The marginal private benefit of vaccines is higher at the optimal quantity than at the market quantity. More people will get vaccinated when only private costs and benefits are considered because the price is lower. Vaccines are more valuable to society than private markets indicate, so the market output will be lower than the optimal level.
Based on the graph, which statement about flu vaccines is true? People who get vaccinated primarily consider the health benefits to the rest of society. The marginal private benefit of vaccines is higher at the optimal quantity than at the market quantity. More people will get vaccinated when only private costs and benefits are considered because the price is lower. Vaccines are more valuable to society than private markets indicate, so the market output will be lower than the optimal level.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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 those who do not purchase a flu shot. This is an example of a positive externality. The demand curve in the graph measures 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 dead weight loss to society by placing the DWL triangle in the correct location.
The Market for Flu VaccinationsPrice ($)Quantity of flu shotssupplymarginal private benefitmarginal social benefitDWLDWL
Based on the graph, which statement about flu vaccines is true?
People who get vaccinated primarily consider the health benefits to the rest of society.
The marginal private benefit of vaccines is higher at the optimal quantity than at the market quantity.
More people will get vaccinated when only private costs and benefits are considered because the price is lower.
Vaccines are more valuable to society than private markets indicate, so the market output will be lower than the optimal level.
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