Suppose that flu shots create a positive externality equal to $12 per shot. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced? a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.

b. The equilibrium quantity is greater than the socially optimal quantity

Explanation:

When a positive externality is present, the market produces less than the socially optimal quantity of the good or service.

Equilibrium quantity is when there is no shortage or surplus of a product in the market. Supply and demand intersect, meaning the amount of an item that consumers want to buy is equal to the amount being supplied by its producers. In other words, the market has reached a perfect state of balance as prices stabilize to suit all parties.

Since at positive externality, the market produces less than the socially optimal quantity, this implies that the the equilibrium quantity is greater than the socially optimal quantity

+15-35=-20

going in opposite directions

the best answer for these questions would be:

1.            c. is smaller

2.            d) concrete operational

3.            b) interaction with the environment – the children interact with their environment can them learn more.

4.            a) parents who reason openly with children can limit a child’s cognitive ability.