toxic waste
as a by-
product.
- Suppose healthcare is provided privately in a free market and
families are responsible for paying for polio vaccinations for their
children. The following supply-and-demand diagram shows the
private marginal costs and private marginal benefits in this
market.
a. Show on the diagram the quantity of polio vaccinations
that would be undertaken in the absence of government
intervention.
b. Describe the externality associated with having a polio
vaccination.
c. Draw a curve showing the social marginal benefit of
vaccinations. Show the socially optimal quantity of
vaccinations. Explain.
