Question: 6. Getting a flu shot reduces not only your chance of getting the flu but also the chance that you will pass it on to

6. Getting a flu shot reduces not only your chance of getting the flu but also the chance that you will pass it on to someone else.

a. Draw a diagram showing the supply and demand curves of inoculating different proportions of the population.

Assume that the marginal cost of each flu shot is constant and is equal to the marginal social cost, and that the demand curve is downward sloping.

b. Will the marginal social benefit curve be higher, lower, or the same as the demand curve? Why? Draw the marginal social benefit curve into your diagram.

c. In your diagram, show the market equilibrium quantity and the socially optimal quantity of flu shots. Is the market equilibrium quantity of flu shots socially efficient?

Why or why not?

d. Many university health centers offer free flu shots to students and employees. Does this solution necessarily achieve efficiency? Explain, using your diagram.

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