Let's look at a COVID-19 vaccine from the economics point of view. There are two ways to

think about what the term "vaccine" represents. They are

(a) A vaccine formula or a method of producing a given vaccine. At this level, a vaccine is just

an idea, a recipe that anyone with a proper equipment can use to produce a vaccine product.

(b) An actual vaccine dose in a physical form (e.g. in a vial) that was manufactured by a

company.

Discuss the rivalry and excludability of these two versions of a good, (a) and (b), and classify

them into one of the 4 categories of goods discussed in Lecture 5. Do you think a competitive

market will produce an efficient quantity of good (a)? What about good (b)? Carefully explain

your reasoning.

If one of the goods cannot be produced by a competitive market, what are the possible solutions

to this problem?