Chapter 5: Q 2 (page 118)
How might the federal or state governments act to try to boost the external benefits arising from inoculations against the measles virus?
The government can grant special privileges to those with the measles vaccination such as subsidized air tickets, and complimentary food.
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Displayed in the diagram below are conditions in the market for residential Internet access in a U.S. state. The government of this state has determined that access to the Internet improves the learning skills of children, which it has concluded is an external benefit of Internet access. The government has also concluded that if these external benefits were to be taken into account, 3 million residents would have Internet access. Suppose that the state government’s judgments about the benefits of Internet access are correct and that it wishes to offer a per-unit subsidy just sufficient to increase total Internet access to 3 million residences. What per-unit subsidy should it offer? Use the diagram to explain how providing this subsidy would affect conditions in the state’s market for residential Internet access.
Who provides the \(16 billion paid to Medicare's "1 percent" every year- alongside the additional \)74 billion in payments to the other 99 percent of the physicians who receive payments from Medicare?
Consider panel (b) of Figure. Assume that a careful study of the likely transmission of influenza in light of a changed population distribution has revealed that the external benefits from inoculations are greater than currently displayed in the graph. In light of this information, is the under allocation of resources to the provision of flu-vaccine inoculations larger or smaller than indicated in panel (b)?
Consider the market for a health care service displayed in Figure, in which the government currently pays a per-unit subsidy M.If the government raises the value of M to a larger dollar amount per unit of service, what will happen to the out-of-pocket price paid by consumers, the price required to induce suppliers to provide services, and the number of services provided? Will the government's total expense for this health care service rise or fall?
Could negative externalities from drone flights be addressed if it were
possible for people to negotiate prices at which drone owners would pay
explicit fees for the right to fly drones above people's properties?Explain
your reasoning
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