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QUESTION

You are appointed Secretary of Health for the United States. It is your job to make decisions as it pertains to national health matters.

You are appointed Secretary of Health for the United States. It is your job to make decisions as it pertains to national health matters. The Centers for Disease Control and Prevention (CDC) notifies you that there is a new disease in the population that may have serious consequences if not quickly controlled. The CDC has created a vaccination for this new disease but recommends against vaccinating the entire population because the vaccination has an undesirable side effect, death. There is no way to tell prior to giving someone the vaccination if they will have this side effect. On the other hand, the vaccination has been proven to mitigate the impact of the disease.

The table below shows the impact of the vaccination program. Based on the percentage of the population that you choose to have vaccinated, the second column shows the cost of the vaccination program in terms of the number of people who have an adverse reaction to the vaccination and die as a result. Assume that there are no other costs.

Percent of population vaccinated

0%

10

20

30

40

50

60

70

80

90

100

Cost of the vaccination program (in millions of dollars).

0

4

14

30

55

80

105

135

165

195

200

The table below shows the impact of the disease based on the proportion of the population that you choose to have vaccinated. Again, assume the cost below is assumed to be the only cost associated with the disease and includes all relevant costs in your decision. Notice that the cost of the disease as you vaccinate more and more of the population decreases

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