I.Written answer, graphical analysis required.

1.The coronavirus pandemic has drawn attention to the importance of vaccinations (and other health care services) for promoting public health and well-being.Draw a supply and demand graph for vaccines that shows a private (individual) market demand curve for vaccines (D) that obeys the law of demand and a market supply curve (S) for vaccines that obeys the law of supply.Label the equilibrium price (P) and quantity (Q) of vaccines produced in the free market.

2.Explain in words and show in your graph the "spillover benefit" that occurs when an individual purchases/receives a vaccine.Label in your graph an MSB curve that shows the marginal social benefits of individuals purchasing/receiving a vaccine.Label in your graph the socially efficient level of vaccines (Q*) and compare to the free market output (Q).Explain why the free market does not produce the socially efficient amount of vaccines and explain what is meant by a socially efficient level of production.

3.What policy (or policies) would you recommend to create a socially economic efficient level of vaccines?

III.Choosing four (4) out of six (6) statements given below, indicate whether you agree, disagree, or are uncertain about the truth of the statement, and explain your reasoning. Graphical analysis is encouraged but not absolutely required.

1."The socially optimal amount of pollution is zero." [Read pp. 363-367 in Chapter 17 of the McEachern text before answering this question]

2."Monopolies should be regulated by antitrust laws and/or government price regulations because left unregulated they do not produce a socially efficient level of output and overcharge for their products."

3."Monopolies and oligopolies have more market power than firms in monopolistically competitive and perfectly competitive industries."

4."A free market will product too much output when negative externalities exist and too little output if positive externalities exist."

5."The Fish Banks game and the coronavirus pandemic demonstrate the 'Tragedy of the Commons'."

6."The U.S. economy has become increasingly competitive over time." [Read pp. 330-340 in Chapter 15 of the McEachern text and consider your Amazon/Facebook homework before answering this question]