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.An efficient quantity is produced if the government
A)subsidizes production by $20 per unit.
B)subsidizes production by $10 per unit.
C)provides vouchers for vaccinations of $20 per unit.
D)taxes production by $10 per unit.
E)either A or C.

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.An efficient quantity is produced if the government
A)subsidizes production by $20 per unit. 
B)subsidizes production by $10 per unit. 
C)provides vouchers for vaccinations of $20 per unit. 
D)taxes production by $10 per unit. 
E)either A or C.

Quizplus · Accepted Answer

An efficient quantity is produced when marginal social benefit equals marginal social cost. In this case, that quantity is 50 vaccinations. However, the market produces only 30 vaccinations, which means the government needs to intervene to increase production. Option A and C both provide a subsidy of $20 per unit, which would decrease the marginal cost of production and increase the quantity produced to the efficient quantity of 50. Therefore, either option A or C is the best choice.

Use the Table Below to Answer the Following Questions