Question

A local school administrator observes an increase in the number of flu cases in the public schools over the last two years. She is concerned that some families cannot afford flu vaccine and are therefore not having children vaccinated. She is also concerned that the failure to vaccinate some children is putting other children at risk, so she proposes that the state subsidize vaccines to increase coverage rates. a. Determine whether the failure to vaccinate some children is an external benefit or an external cost. If an external cost is present, move point A and point B to show the marginal social cost curve. If an external benefit is present, move point A and point B to show the marginal social benefit curve. Place point C at the equilibrium outcome. Place point D at the socially optimal outcome. Measle vaccines Supply (marginal private col) Price Demand (marginal private benelit) Quantity b. From an efficiency perspective, subsidizing vaccines make sense because without the subsidy, the equilibrium quantity is the socially optimal quantity. The school nurse suggests publishing a list of which kids did not get a flu vaccine, in the hope that public shaming will lead people to vaccinate their children. c. The school nurse is hoping that social norms will act like a and lead the market to a outcome. d. What flaws might the school nurse's suggestion have? Select all that apply. Parents with immunocompromised children will know which students are not vaccinated and can take precautions to keep their kids safer by knowing if a student in their child's class is a potential carrier. People that feel passionate about not vaccinating are typically doing so for medical or religious reasons and will not sway to social norms or peer pressure. The school would potentially face a lawsuit because sharing protected health information (PHI), like immunization records, without parents' consent could be a violation depending on regulations of the state.

Answer 1

1. It should be noted that the failure to vaccinate some children isn an external cost. [See the attached graph]
2. The social cost curve is also indicated accordingly.
3. From an efficiency perspective, subsidizing vaccines does make sense because, without the subsidy, the equilibrium quantity is less than the socially optimal quantity.
4. The school nurse suggests publishing a list of which kids did not get a flu vaccine, in the hope that public shaming will lead people to vaccinate their children. The school nurse is hoping that social norms will act like a punishment  and lead the market to a socially efficient
5. The flaws that the school nurse's suggestion have are:
   

• People that feel passionate about not vaccinating are typically doing so for medical or religious reasons and will not sway to social norms or peer pressure. (Option B)

• The school would potentially face a lawsuit because sharing protected health information (PHI), like immunization records, without parents' consent could be a violation depending on the regulations of the state. (Option C)

What is social Cost?

In neoclassical economics, the social cost is the total of the transaction's private costs plus the costs imposed on consumers as a result of being exposed to the process for which they are not rewarded or taxed.

In other words, it is the total of internal and external expenses.

Learn more about social cost:
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