This question is based on the current Covid-19 pandemic. Supposethe risk of being infected or infecting others while eating inrestaurants is high. Consider the market for dine-in restaurantmeals. Is there a discrepancy between the marginal private andsocial benefit (or cost)? Show on a graph the quantity ofrestaurant meals that would be sold and the quantity that wouldmaximize economic surplus. Is there a discrepancy between the two?What solution do you think would be most appropriate to deal withthis? What solution was taken by most governments? Do you agreewith it or not?
