Figure 5.6

Shingles vaccinations for adults benefit society by protecting adults and by preventing an epidemic of the disease. Thus, the social benefits of shingles vaccinations exceed the private benefit for any quantity of vaccinations as illustrated in Figure 5.6.
-Refer to Figure 5.6.What is the value of the net gain to society as a result of subsidizing shingles vaccinations?

Question

Figure 5.6
  
Shingles vaccinations for adults benefit society by protecting adults and by preventing an epidemic of the disease. Thus, the social benefits of shingles vaccinations exceed the private benefit for any quantity of vaccinations as illustrated in Figure 5.6.
-Refer to Figure 5.6.What is the value of the net gain to society as a result of subsidizing shingles vaccinations?

Quizplus · Accepted Answer

The value of the net gain to society as a result of subsidizing shingles vaccinations is equal to the area of FEG, which represents the difference between the social benefit (SF) and the private cost (PC) of each vaccination. This is because the social benefits of shingles vaccinations exceed the private benefit for any quantity of vaccinations. Choice A is incorrect because PE represents the private benefit of each vaccination, not the net gain to society. Choice B is incorrect because PF represents the private cost of each vaccination, not the net gain to society. Choice D is incorrect because it includes the private benefit (PE) and private cost (PF) components, which are not relevant to the net gain to society.

Figure 5.6 Shingles Vaccinations for Adults Benefit Society by Protecting Adults and Society