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Please label diagram for Part A. Label when the MSC, MPC, MPB and MSB go. 7. The Role of Government: Subsidy and the Flu vaccine

Please label diagram for Part A. Label when the MSC, MPC, MPB and MSB go.

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7. The Role of Government: Subsidy and the Flu vaccine [6 points] Several policy options have been proposed to encourage more people to be vaccinated against the flu. The diagram below shows how a subsidy from government to consumers might be used to achieve this goal. A. In the diagram, identify the lines that express the Marginal Social Cost, Marginal Private Cost, Marginal Private Benefit, and Marginal Social Benefit. [2 points] Price per does (P) X Number of flu vaccines B. Using the diagram, indicate the per dose subsidy paid by the government, and show how the subsidy will affect the price paid by consumers and the price received by manufacturers of the vaccine. [4 points] C.How would you calculate: (1) the total amount of subsidy incurred by the government to socially efficient allocate

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