California on Thursday became the latest state to announce huge cash prizes to incentivize vaccination against the coronavirus, offering $116.5 million in giveaways many smaller payments as well as a final drawing for 10 winners of $1.5 million each.

As rates of vaccination slow, more state and local leaders are getting creative to boost an urgent effort to protect Americans from covid-19 and get communities back to normal. Some incentives are more modest: free fries, bouquets or alcohol. (Louisiana, for instance, recently debuted "shots for shots.") But Ohio Gov. Mike DeWine (R) upped the ante this month when he announced a multimillion-dollar lottery. Soon, other states followed suit.

Some have questioned the strategy's cost-effectiveness, and one reporter asked Gov. Gavin Newsom (D) at a Thursday news conference whether he ever thought California would have to spend so much to get people to get free vaccinations against a deadly disease.

"The cost of not getting vaccinated is exponentially, incalculably higher," Newsom said.

question 1

Apply the economic concept of externality to explain why some individuals are sceptical of Covid 19 vaccine while the government is urging people to take the vaccine.

question 2

What does the incentive of $116.5 million incentive in vaccine tell us about the magnitude of the external effect?