Suppose That the Marginal Private Benefit of a New Vaccine $M P B = 10 - Q$

question 42

Multiple Choice

Suppose that the marginal private benefit of a new vaccine could be measured as $M P B = 10 - Q$ . Suppose that the marginal social benefit could be measured as $M S B = 12 - Q$ . Suppose that the private marginal cost curve could be measured as $M P C = Q$ . What amount of a per-unit subsidy would encourage the optimal societal consumption of the vaccine?

• A) $1.
• B) $2.
• C) $4.
• D) $6.

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Definitions:

Unconscious Processing

Mental processes that occur without conscious awareness or intention, influencing perceptions, thoughts, and behaviors.

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one's preconceptions, leading to statistical errors.

System I

A term often used to describe intuitive, fast, and automatic thinking processes, as opposed to more deliberate and analytical decision-making.

System II

A term often used to describe slow, deliberate, and analytical thought processes in dual-process theories of cognition.