Figure 4-12 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 4-12.
-Refer to Figure 4-12.What is the value of the net gain to society as a result of subsidizing chicken pox vaccinations?

Question

Figure 4-12  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 4-12.
-Refer to Figure 4-12.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 is determined by the difference between the social benefits and the private cost of producing the vaccinations. In this case, the social benefits exceed the private benefits, indicating that there is a positive externality associated with vaccination. The value of the net gain to society is equal to the area of FEG, which represents the difference between the total benefits (PF × QF) and the private cost (PE × QE). Therefore, the correct choice is C, value equal to the area of FEG.

Figure 4-12 Chicken Pox Vaccinations for Toddlers Benefit Society