Figure 5-10

Chicken pox vaccinations for toddlers benefit society by protecting young children and by preventing an epidemic of the disease. Thus, the marginal social benefits of chicken pox vaccinations exceed the marginal private benefit for any quantity of vaccinations as illustrated in Figure 5-10.
-Refer to Figure 5-10.What is the value of the net gain to society as a result of subsidizing chicken pox vaccinations?

Question

Figure 5-10
  
Chicken pox vaccinations for toddlers benefit society by protecting young children and by preventing an epidemic of the disease. Thus, the marginal social benefits of chicken pox vaccinations exceed the marginal private benefit for any quantity of vaccinations as illustrated in Figure 5-10.
-Refer to Figure 5-10.What is the value of the net gain to society as a result of subsidizing chicken pox vaccinations?

Quizplus · Accepted Answer

The net gain to society can be calculated by finding the difference between the total social benefits and the total social costs, which is equal to the area of the triangle EFH. This represents the positive externalities (benefits to society beyond the individual receiving the vaccination) generated by the vaccinations. The other options, such as (PE x QE) and (PF x QF), do not accurately represent the net gain to society as they only calculate the benefits to individuals or the costs to society. The area of QFFGQE represents the total social costs.

Figure 5-10 Chicken Pox Vaccinations for Toddlers Benefit Society by Protecting Young