Use the table below to answer the following questions.
Table 15.3.1
-Refer to Table 15.3.1.The table shows marginal private benefit and the marginal social benefit from flu vaccinations and the marginal social cost of vaccination production.If production is left to the private market,then
A)an efficient quantity is produced.
B)imposing a tax leads to production of the efficient quantity.
C)too many vaccinations are produced.
D)a system of pollution permits leads to production of the efficient quantity.
E)an inefficient quantity is produced.

Question

Use the table below to answer the following questions.
Table 15.3.1 
-Refer to Table 15.3.1.The table shows marginal private benefit and the marginal social benefit from flu vaccinations and the marginal social cost of vaccination production.If production is left to the private market,then
A)an efficient quantity is produced. 
B)imposing a tax leads to production of the efficient quantity. 
C)too many vaccinations are produced. 
D)a system of pollution permits leads to production of the efficient quantity. 
E)an inefficient quantity is produced.

Quizplus · Accepted Answer

The marginal private benefit (MPB) is always greater than the marginal social benefit (MSB) indicating that there is a positive externality associated with flu vaccinations. The marginal social cost (MSC) curve intersects the MPB curve at a quantity lower than the quantity at which the MSB curve intersects the MPB curve. This implies that too few vaccinations are produced in the private market, resulting in an inefficient outcome. Therefore, the best choice is E, an inefficient quantity is produced.

Use the Table Below to Answer the Following Questions