Suppose That Flu Shots Create a Positive Externality Equal to $12

question 69

Multiple Choice

Suppose that flu shots create a positive externality equal to $12 per shot. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?

• A)They are equal.
• B)The equilibrium quantity is greater than the socially optimal quantity.
• C)The equilibrium quantity is less than the socially optimal quantity.
• D)There is not enough information to answer the question.

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Definitions:

Childhood Stage

A developmental period in a person's life that spans from birth to the onset of adolescence, characterized by rapid physical, cognitive, and emotional growth.

Libido

In psychoanalytic theory, libido is the energy of the sexual drive as a component of the life instinct.

Phallic Stage

A stage in Freudian psychosexual development, when a child's focus of pleasure is on the genital area.

Freud

refers to Sigmund Freud, an Austrian neurologist who founded psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.