Tuition price ceilings and the flu vaccine market

Part A is a price ceiling with the supply side pinned down: state funding is held constant, so universities cannot expand places, and tuition below equilibrium leaves quantity demanded above quantity supplied. That is a shortage, and its consequences are the answer — applications rise, admissions standards tighten, waiting lists and queues appear, class sizes grow, quality erodes as revenue per student falls, and non-price rationing takes over. Give the one example the prompt asks for: an applicant with the required grades who cannot get a place because there are three qualified applicants for every seat. The second question is the trap and it is worth answering carefully. Education is not equally accessible under these conditions, because when price stops rationing, something else starts — preparation, test coaching, information, connections and the ability to wait. Those correlate with income too, so the policy can redistribute toward the already-advantaged.

Part B moves to the flu shot and the concept is a positive externality rather than a pure public good, which is worth saying precisely. A vaccination is excludable and rival — a dose given to one person cannot be given to another — so it fails the strict definition. What makes it market-failing is that vaccination protects other people, and an individual deciding whether to be vaccinated weighs only their own benefit against their own cost. That private calculation understates the social benefit, so the private market under-provides at the socially efficient level: the marginal social benefit exceeds the marginal private benefit, and the equilibrium quantity is too low. Government involvement follows directly — subsidy, free provision, workplace and school programmes, purchase guarantees to stabilise manufacturing, and mandates in some settings — each of which closes the gap between private and social benefit. Name which mechanism you are describing rather than saying the government helps.