Question

An external benefit, such as happens with a flu shot, is a transaction that

1.offers benefits to others at no cost to themselves

2.costs more to others than to the flu shot recipient

3. means the flu shot recipient is more likely to catch the flu

4. doesn't happen in a market economy

Answer 1

Answer. (1) offers benefits to others at no cost to themselves.

Explanation: As most of the countries offer flu shots and other vaccines free of cost, so it acts as an external benefit. This means that by a transaction between the flu shot receiver and the govt, other people are benefitted. This is because then that person will no longer catch the flu and thus no longer transmit it to other nearby people, thus protecting their health. This is similar to herd immunity.

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