Question

1. Which of the following is not an example of public health initiative with positive externalities?

   Select the correct answer below:

encouraging people to quit smoking

withdrawing public funding for sanitation systems

requiring that all children be vaccinated prior to starting school

posting signs in public restrooms reminding people to wash their hands

2. Assume that the marginal social benefit of the last unit of vaccination provided is greater than the marginal social cost. Which of the following can be used to achieve efficiency in the market for vaccination?

Select the correct answer below:

• A per-unit subsidy for vaccinations

• A lump-sum tax for vaccinations

• A price ceiling for vaccinations

• A per-unit tax on vaccinations

Answer 1

Correct answer for question 1---

Withdrawing public funding for sanitation system

(The other three points are depicting Public health initiative with positive externality - encouraging people to quit smoking ,all children to be vaccined before starting school,posing signs in public rest rooms to remind people to wash hands all these three points comprise public health initiatives)

Question 2------(A)

Per unit subsidy for vaccination

( Reason - social efficiency occurs when marginal social benefit is equal to marginal social cost.i.e MSB=MSC.but in this case MSB is greater than MSC ,which means if the quantity of vaccination is increased, the efficiency level van be achieved.the production can be increased if the govt provides subsidy on it.)

other factors mentioned in question donot hold good.

Thank you.