Question
Using Figure 19.3 as a basis, explain how a $5 tax on those who are not inoculated will result in an efficient output (you do
Using Figure 19.3 as a basis, explain how a $5 tax on those who are not inoculated will result in an efficient output (you do NOT need to create a graph). Name at least two reasons why this approach is unlikely to work in practice.
Can you please help me with the second reason?
The first reason is: Imposing a tax of $5 on the portion of the population that is not inoculated will directly impact the opportunity cost associated with inoculation. After deducting a tax of five dollars from the total cost we will be able to get the new opportunity cost. The tax deduction will have a direct impact on the supply curve as it will move downward. This approach may not work due to disparities in income distribution within the population. There also exist cultural complexities within the society which makes this approach less likely to work.
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