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

question 47

Multiple Choice

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

Debt Securities

Financial instruments that represent a loan made by an investor to a borrower, typically consisting of corporate bonds, government bonds, and other types of loans.

Financial Institutions

Intermediary between savers and borrowers, collecting funds from savers and then lending the funds to individuals, businesses, and governments.

Certificate of Deposit

A financial product offered by banks that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period.

Time Deposit

A bank deposit with a fixed term or maturity date, often yielding higher interest rates than savings accounts.