The consumption of annual influenza vaccinations generates positive consumption externalities.
This means that at any given level of output:
the socially optimal level of consumption is lower than the market equilibrium level.
the marginal private cost exceeds the marginal social cost at all levels of output.
the marginal social benefit is greater than the marginal private benefit.
the marginal external benefit is fully internalized by individual consumers.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.