Answer to Question #285264 in Microeconomics for giahue

Question

Analyze whether social benefits, social costs, etc. are affected by vaccine shortages.

Draw diagrams to illustrate. (Obligatory)

Answer 1

Social cost is defined as the total cost the society pays for due to the activities of a firm. It is a combination of all the external cost and private cost. Social benefit on the other side is defined as the total benefit that arise due to the production of goods and services by a firm. It is equal to the total of both private and external benefits. Shortage of vaccines has affected both the social cost and benefits.

Social Benefits include;

For vaccines having side effects on the society the benefit is reduced side effects.

Social Costs include;

Increased death rate

Failure to eradicate disease

As it is evident below, shortage of vaccine shifts the Social Marginal cost curve inwards and also the social marginal benefit shifts inward.