Flu Shots Provide a Positive Externality

question 77

Multiple Choice

Flu shots provide a positive externality. Suppose that the market for vaccinations is perfectly competitive. Without government intervention in the vaccination market, which of the following statements is correct?

• A)At the current output level, the marginal social benefit exceeds the marginal private benefit.
• B)The current output level is inefficiently low.
• C)A per-shot subsidy could turn an inefficient situation into an efficient one.
• D)All of the above are correct.

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Definitions:

Problem Definition

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Conflict Resolution

The process of identifying and addressing differences between parties to reach an amicable agreement or solution.

Misunderstanding

A failure to understand something correctly, leading to errors in communication or perception.

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