Edgar's Expected Private Benefit from the Flu Shot Is $15

question 32

Multiple Choice

Edgar's expected private benefit from the flu shot is $15, and it would cost him $20 to get vaccinated. Therefore, which statement is correct?

• A) It is socially optimal for Edgar to get the flu shot if the social benefits of the shot exceed $20.
• B) The external benefits of the flu shot equal $5 ($20 - $15).
• C) Even without a government subsidy, Edgar is certain to be vaccinated.
• D) The deadweight loss is eliminated if Edgar is vaccinated and the external benefits are $4.

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Definitions:

Explanation of Benefits (EOB)

A document provided by insurance companies detailing what treatments/services were covered and what payment responsibilities the insured has.

Charge

The price or cost that someone has to pay for goods, a service, or admission to an event.

Third-Party Reimbursement

A phrase coined to indicate payment of services rendered by someone other than the patient. Today, the most common third-party payers are federal and state agencies, insurance companies, and workers’ compensation.

National Provider Identifier (NPI)

The name of the standard unique health identifier for health care providers.