What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care
What will be an ideal response?
An externality is a benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service. Someone who receives a meningitis vaccination is protecting not just himself or herself from the disease, but also reduces the chances that people who have not been vaccinated will contract the disease. In this case, receiving the vaccination provides a positive externality.
You might also like to view...
What is the slope of the line in the graph?
A) +1/2 B) -1/2 C) +2 D) -2 E) -3/4
A(n) ________ market is a non-legal market for regulated goods and services
A) open B) closed C) black D) oligopoly
The long-standing debate over rules versus discretion in macroeconomics centers on the following statement ________
A) "discretionary policy can lead to bad long-run outcomes but rules lack flexibility in the short-run" B) "the speed with which the self-correcting mechanism in the economy acts is in question" C) "the speed with which unemployment tends to disappear is debatable" D) all of the above E) none of the above
Holding all variables constant but one and assessing the impact of the one variable that has changed is an example of using
A) the ceteris paribus assumption. B) an economic model based on unrealistic assumptions. C) a flawed economic model. D) an untestable proposition.