Suppose That a Vaccine Is Developed for a Highly Contagious

question 14

Multiple Choice

Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the vaccine. The private market equilibrium quantity is ______ doses per day.

• A)50
• B)75
• C)100
• D)125

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Definitions:

Substitution Effect

The economic theory that as prices rise, or income decreases, consumers will replace more expensive items with less costly alternatives.

Output Effect

The impact on total output or production when a company expands its operations or when there is an increase in economic activity.

Increase In Rent

An upward adjustment in the payment required for the use of rental property, usually determined by market conditions or lease agreements.

Demand For Land

The desire and willingness of consumers or businesses to purchase land at given prices, influenced by factors such as location and potential for appreciation.