Before the flu season begins, Jeremy gets a flu shot. As a result, Jeremy and several of his friends and relatives avoid the flu for the entire flu season. It would make sense to argue that
a. flu shots provide a positive externality, and that flu shots should be subsidized.
b. if flu shots are not subsidized, then the number of people getting flu shots will be smaller than the socially optimal number.
c. the externality generated by flu shots is more like the externality generated by education than the externality generated by pollution.
d. All of the above are correct.
d
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