When People Decide Whether or Not to Get a Flu

question 98

Multiple Choice

When people decide whether or not to get a flu vaccination,they ignore the ________ and as a result ________.

• A) marginal private benefit; too few vaccinations are given
• B) external benefit; too few vaccinations are given
• C) private cost; too many vaccinations are given
• D) marginal external cost; vouchers must be provided
• E) social cost; too many vaccinations are given

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Definitions:

Reinvestment Rate

The rate of return available to investors when they reinvest the earnings from an investment during the life of that investment.

Coupon Interest

The periodic interest payment that bondholders receive from the bond's issuer during the bond's life.

Prevailing Reinvestment Rate

The current market interest rate at which cash flows from an investment can be reinvested.

Compound Yield

The rate of return on an investment or loan, considering the effect of compounding interest.