Cameron is a newborn baby whose parents are thinking about vaccinating him against disease. The figure illustrates the marginal benefits and marginal costs of vaccinations for Cameron. Cameron's community derives benefits from Cameron being vaccinated, as illustrated by the positive externality curve above. Given this information, if the community wants Cameron to obtain the socially optimal number of vaccinations, they could

a. Impose a tax on Cameron to help pay for the vaccinations. 

b. Provide a subsidy to Cameron to help pay for the vaccinations. 

c. Impose a restriction on the number of vaccinations that Cameron can get.

d. Do nothing because Cameron's parents will choose with the socially optimal quantity of vaccinations without community intervention.

Transcribed Image Text:

40 35 0 25 20 5 30 25 15 10 MB Positive Externality **** MC MBcial 5 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (number of vaccinations per lifetime)