To ensure that all families are protected from influenza, Berkeley's Public Health division is giving free flu vaccines at a Free Flu Clinic on October 28, 2010. What is NOT true about the externality that exists in this example?
A) Marginal social cost for flu vaccines will decrease when there is a subsidy.
B) Marginal social benefit for flu vaccines is greater than marginal private benefit for flu vaccines.
C) To increase the quantity consumed of flu vaccines, there will be public provision of the flu vaccines.
D) Being vaccinated against the flu creates an external benefit.

Question

Quizplus · Accepted Answer

The given statement is not related to the externality that exists in this example. The externality in this example is that being vaccinated against the flu creates an external benefit, as it not only protects the vaccinated individual but also those around them by reducing the spread of the flu. Marginal social benefit for flu vaccines is greater than marginal private benefit for flu vaccines, and to increase the quantity consumed of flu vaccines, there will be public provision of the flu vaccines.

To Ensure That All Families Are Protected from Influenza, Berkeley's