Economics Assignment #4/Assignment #1

ECONOMICS 110/112* Assignment #4/Assignment #1 – Suggested Solutions

2014/2015 Due Dates and Notes:  DUE: By Friday January 30, 2:00 PM. Completed assignments should be placed in the slot marked for your section in the white assignment collection box on the 2nd floor of Dunning Hall. Late assignments will not be accepted. Use the Cover Page (download from the Assignments page on moodle) when submitting assignments. Place diagrams for particular questions with your answers to those questions (not all at the end). Group Work: Maximum four per group, all students must be registered in the same class. Names (as they appear on moodle) must be in alphabetical order on the cover page (last names first). Graded work will be available for pick-up beginning on the afternoon of Friday February 13 in the Econ Distribution Center, Dunning Hall Room 334. You will require your student card. This assignment covers material from Chapters 16-19 of the text for the 110 assignment and Chapters 1, 2, 33 (pp 802-13), 3, and 19 for the 112 assignment.

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True, False, or Uncertain

[48 marks - 6 marks each]

Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the explanation that is important.

110 assignment – first five questions (first five for 112 follow)

A4-1. The Ontario government now provides (pays for) influenza vaccinations free to all residents who want them. This policy will result in less deadweight loss in the flu shot market than private purchases of “flu” shots. [Hints: Assume that the flu is highly contagious and that the vaccination supply curve is perfectly elastic.] Uncertain. Under private decision-making an individual would choose to get a flu shot whenever the net private benefit (MPB) of doing so (expected reduction in “flu costs” less the time and trouble of getting a shot) is greater than or equal to the...