The Covid-pandemic has forced policymakers to design and implement a series of new policies in the last two years.

1. At the beginning of the pandemic, public health officials warned that young people, who have a lower risk of suffering serious consequences from contracting coronavirus should still not go out. Explain the externality involved with young people going out, but why they may choose to do so anyway. 2. Explain whether or not we can rely on Coasian bargains to resolve the externality problem in this instance. If not, what would be an appropriate intervention? 3. The Austrian government has announced a vaccination lottery. Explain the externality involved with the vaccine and the intended effect of the lottery.