In response to the Gates Malaria Forum in October 2007, countries are debating the pros and cons of eradication. Dr. Arata Kochi of the World Health Organization believes that with enough money malaria cases could be cut by 90 percent, but he believes that it would be very expensive to eliminate the remaining 10 percent of cases. He concluded that countries should not strive to eradicate malaria.
a. Is Dr. Kochi talking about production efficiency or allocative efficiency or both?
b. Make a graph with the percentage of malaria cases eliminated on the x-axis and the marginal cost and marginal benefit of driving down malaria cases on the y-axis. On your graph:
(i) Draw a marginal cost curve that is consistent with Dr. Kochi’s opinion.
(ii) Draw a marginal benefit curve that is consistent with Dr. Kochi’s opinion.
(iii) Identify the quantity of malaria eradicated that achieves allocative efficiency.