Answered: The Covid-19 is a highly contagious…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The Covid-19 is a highly contagious disease. Although there are vaccines for

Covid-19, the vaccination is not free and there are side effects of the vaccine,

making it less suitable especially for senior citizens. The government encourages

people to go for vaccination against Covid-19 but make it optional. Discusswith

a suitable market diagram whether the vaccination market is efficient. Will the

vaccination market be efficient if the government makes it compulsory for all

people to take the vaccine? Explain with a suitable diagram.

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

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