3. Government has a study completed of the impact of vaccinations on the population. The finding...
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3. Government has a study completed of the impact of vaccinations on the population. The finding of the study is that vaccines increase the health of the population, which reduce the costs for the health system. The study estimates that the benefit from vaccination is 2 per shot. The government will therefore give every person who gets vaccinated 2 per shot. a. What type of externality is the market facing and why? b. Please define the free rider problem. i. Is the market faced with this problem? If yes, please explain why and also how this market failure can be solved. c. Show the effect of a 2 per shot corrective subsidy in a supply and demand diagram. Please label all relevant curves as well as the market equilibrium, the social optimum and the relevant prices. P Label everything clearly! Q 3. Government has a study completed of the impact of vaccinations on the population. The finding of the study is that vaccines increase the health of the population, which reduce the costs for the health system. The study estimates that the benefit from vaccination is 2 per shot. The government will therefore give every person who gets vaccinated 2 per shot. a. What type of externality is the market facing and why? b. Please define the free rider problem. i. Is the market faced with this problem? If yes, please explain why and also how this market failure can be solved. c. Show the effect of a 2 per shot corrective subsidy in a supply and demand diagram. Please label all relevant curves as well as the market equilibrium, the social optimum and the relevant prices. P Label everything clearly! Q
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a The market is facing a positive externality from vaccinations A positive externality exists when a... View the full answer
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date:
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