Which example illustrates a policy solution to inefficiency in the free market caused by the stated externality?
A)The city government imposes rent control.The externality is that housing's quantity demanded exceeds the quantity supplied at the current price.
B)The federal government imposes a minimum wage.The externality is that firms pay too little to their workers.
C)The government offers free childhood immunizations.The externality is that an immunized child cannot transmit disease to others.
D)The federal government provides national defense.The externality is that people can't be excluded from national defense,even if they don't pay for it.

Question

Quizplus · Accepted Answer

By offering free childhood immunizations, the government is addressing the externality that an unvaccinated child can transmit disease to others. This policy solution helps to internalize the positive externalities that come from vaccinating as many children as possible.

Which Example Illustrates a Policy Solution to Inefficiency in the Free