Figure 15.10 Chicken pox vaccinations for toddlers benefit society by protecting young children and by preventing an epidemic of the disease.Thus, the social benefits of chicken pox vaccinations exceed the private benefit for any quantity of vaccinations as illustrated in Figure 15.10.
-Refer to Figure 15.10.One way to obtain the economically efficient amount of chicken pox vaccinations is for governments to subsidise these vaccinations.What is the size of the per-vaccination Pigovian subsidy that the government must provide to internalise the external benefits?

Question

Figure 15.10  Chicken pox vaccinations for toddlers benefit society by protecting young children and by preventing an epidemic of the disease.Thus, the social benefits of chicken pox vaccinations exceed the private benefit for any quantity of vaccinations as illustrated in Figure 15.10.
-Refer to Figure 15.10.One way to obtain the economically efficient amount of chicken pox vaccinations is for governments to subsidise these vaccinations.What is the size of the per-vaccination Pigovian subsidy that the government must provide to internalise the external benefits?

Quizplus · Accepted Answer

To internalize the external benefits, the per-vaccination Pigovian subsidy that the government must provide is equal to the difference between the social benefits and the private benefits. This is shown as (P_E- P_G). Therefore, the correct answer is B.

Figure 1510 Chicken Pox Vaccinations for Toddlers Benefit Society by by Protecting