To ensure all students are protected from getting the flu this year, your school offers free flu shots. What type of externality exists in this example?
A) Positive production externality
B) Positive consumption externality
C) Neutral externality.
D) Negative production externality
E) Negative consumption externality

Question

Quizplus · Accepted Answer

When individuals receive flu shots, they not only protect themselves from getting the flu but also reduce the likelihood of transmitting the virus to others. This creates a benefit for people who are not directly involved in the consumption of the flu shots, which is a classic example of a positive consumption externality.

To Ensure All Students Are Protected from Getting the Flu