Polio is a disease caused by a contagious virus that can result in paralysis. A vaccine prevents the disease and also its contagion. The government decides to subsidize the application of this vaccine by offering it for free. a. Explain how this subsidy will impact the amount of vaccines applied compared to the free market outcome with no subsidy, i.e. where people would need to pay for their own vaccine. b. Why is this subsidy different from a subsidy the government may grant on a good that generates no externalities like food? (hint: deadweight loss is not the same),

Polio is a disease caused by a contagious virus that can result in paralysis. A vaccine prevents the disease and also its contagion. The government decides to subsidize the application of this vaccine by offering it for free. a. Explain how this subsidy will impact the amount of vaccines applied compared to the free market outcome with no subsidy, i.e. where people would need to pay for their own vaccine. b. Why is this subsidy different from a subsidy the government may grant on a good that generates no externalities like food? (hint: deadweight loss is not the same),

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 3PA

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The south African government develops targets that pertain to healthcare and education. Which of the following statements explains why government provides these two goods? A. The benefit to society of healthcare and education is extremely low. B. The benefits that society receives from health care and education exceed those that accrue to an individual user. C . The government spends money on health care and education because they are public goods D. Health care and education only produce negative externalities.
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