1.10. A new vaccine against a deadly disease has just been discovered.

Presently, 55 people die from the disease each year. The new vaccine will save lives, but it is not completely safe. Some recipients of the shots will die from adverse reactions. The projected effects of the inoculation are given in the accompanying table:

a. What are the interpretations of “marginal benefit” and “marginal cost” here? Calculate marginal benefit and marginal cost per each 10% increase in the rate of inoculation. Write your answers in the table.

b. What proportion of the population should optimally be inoculated?

c. What is the interpretation of “profit” here? Calculate the profit for all levels of inoculation.

Transcribed Image Text:

Total Percent of popu- Total deaths deaths Marginal benefit due to of Marginal cost of lation due to inocu- inocu- inocu- "Profit" of inocu- inoculated disease lation lation lation lation 0 55 0 10 45 0 20 36 1 30 28 3 40 21 6 50 15 10 60 10 15 70 6 20 80 3 25 90 1 30 100 0 35