UESTION 5 The optimal level of pollution is achieved when: the level of pollutio
ID: 1140340 • Letter: U
Question
UESTION 5
The optimal level of pollution is achieved when:
the level of pollution reaches zero.
the marginal social benefit from decreased pollution is equal to the marginal social cost of reducing pollution.
pollution abatement exceeds the pollution level.
benefits from further pollution abatement are zero.
a.the level of pollution reaches zero.
b.the marginal social benefit from decreased pollution is equal to the marginal social cost of reducing pollution.
c.pollution abatement exceeds the pollution level.
d.benefits from further pollution abatement are zero.
Explanation / Answer
The correct answer is option b. The optimal level of pollution is achieved when the marginal social benefit from decreased pollution is equal to the marginal social cost of reducing pollution. If the marginal social cost of reducing pollution was greater than the marginal benefit from reducing pollution, then there is no point of incurring that cost since it is yielding no benefits. If marginal benefit from reducing pollution was greater than the marginal cost of reducing pollution, then it is worthwhile to incur the costs so that the benefits can be reaped.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.