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Chapter 2: Problem 14

The mayor of Gotham City, worried about a potential epidemic of deadly influenza this winter, asks an economic adviser the following series of questions. Determine whether a question requires the economic adviser to make a positive assessment or a normative assessment. a. How much vaccine will be in stock in the city by the end of November? b. If we offer to pay \(10 \%\) more per dose to the pharmaceutical companies providing the vaccines, will they provide additional doses? c. If there is a shortage of vaccine in the city, whom should we vaccinate first \(-\) the elderly or the very young? (Assume that a person from one group has an equal likelihood of dying from influenza as a person from the other group.) d. If the city charges \(\$ 25\) per shot, how many people will pay? e. If the city charges \(\$ 25\) per shot, it will make a profit of \(\$ 10\) per shot, money that can go to pay for inoculating poor people. Should the city engage in such a scheme?

Short Answer

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Answer: Positive assessment b. If we offer to pay 10% more per dose to the pharmaceutical companies providing the vaccines, will they provide additional doses? Answer: Positive assessment c. If there is a shortage of vaccine in the city, whom should we vaccinate first – the elderly or the very young? Answer: Normative assessment d. If the city charges $25 per shot, how many people will pay? Answer: Positive assessment e. If the city charges $25 per shot, it will make a profit of $10 per shot, money that can go to pay for inoculating poor people. Should the city engage in such a scheme? Answer: Normative assessment

Step by step solution

01

a. How much vaccine will be in stock in the city by the end of November?

This question seeks factual information about the available vaccine supply. Therefore, it requires a positive assessment.
02

b. If we offer to pay \(10 \%\) more per dose to the pharmaceutical companies providing the vaccines, will they provide additional doses?

This question is asking about the effect of increasing payments to pharmaceutical companies on vaccine supply. So, it needs a positive assessment to determine cause-and-effect relationships.
03

c. If there is a shortage of vaccine in the city, whom should we vaccinate first \(-\) the elderly or the very young?

This question involves making a decision based on values and priorities. Thus, it requires a normative assessment.
04

d. If the city charges \(\$ 25\) per shot, how many people will pay?

This question is looking for an estimation of demand based on pricing. Hence, it needs a positive assessment to establish a relationship between price and demand.
05

e. If the city charges \(\$ 25\) per shot, it will make a profit of \(\$ 10\) per shot, money that can go to pay for inoculating poor people. Should the city engage in such a scheme?

This question calls for evaluating the pros and cons of a proposed policy, which involves making a judgment based on values and beliefs. Therefore, it requires a normative assessment.

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Most popular questions from this chapter

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