A)why might a Covid-19 vaccine create positive externalities?
B)Using the relevant economic intuition explain why individuals are more likely to underuse or overuse face masks against Covid-19 infections.
C)Draw a graph of the Covid-19 vaccine market, illustrating the demand curve social demand curve, and supply curve. On your graph, indicate the perfectly competitive output of vaccines and the socially optimal output.
(1) In an economy, there are a total of 20 units of labor and 10 units of capital that can be allocated to produce food or clothing.
a. Draw the production Edgeworth box.
b. Using isoquants, illustrate a Pareto-efficient allocation of labour and capital between the
food and clothing sectors.
c. Using isoquants, illustrate a Pareto-inefficient allocation of labour and capital between
the food and clothing sectors.
(2) What is the First Welfare Theorem? What conditions are required for it to hold true?
