Which of the following offers the best economic justification for subsidizing vaccinations for infectious disease on the basis of efficiency?
a. Vaccinations create a positive externality for society because they reduce the chances the scope of epidemics.
b. Vaccinations are a type of pollution that increase the chances and the scope of epidemics
c. A politician offering subsidized vaccinations may be able to get more votes from lower income people and get elected.
d. None of the answers above are correct.
a
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A constant-cost, perfectly competitive market is in long-run equilibrium. At present, there are 1,000 firms each producing 400 units of output. The price of the good is $60
Now suppose there is a sudden increase in demand for the industry's product which causes the price of the good to rise to $64. In the new long-run equilibrium, how will the average total cost of producing the good compare to what it was before the price of the good rose? A) The average total cost will be the same as it was before the price increase. B) The average total cost will be lower than it was before the price increase because of economies of scale. C) The average total cost will be higher than it was before the price increase because of diseconomies of scale arising from the increased demand. D) The average total cost will be higher than it was before the price increase since the increase in demand will drive up input prices.
If the aggregate supply curve is vertical, it follows that a change in
A) Real GDP can originate on the demand side of the economy. B) Real GDP can originate on the supply side of the economy. C) Real GDP can originate on either the demand side or the supply side of the economy. D) price level can originate on the demand side of the economy. E) b and d