Refer to the figure above. A program that reduces emissions from the uncontrolled level of e₁ to emissions level e₂ A) reveals total costs equal to area (a+b+c+d). B) is clearly preferable to e*, where MD=MAC. C) yields negative net benefits because the MD curve lies above the MAC curve. D) reveals net benefits of (a + b) - (b).

Question

Quizplus · Accepted Answer

The net benefits are calculated as the area under the marginal damage (MD) curve minus the area under the marginal abatement cost (MAC) curve, which simplifies to area (a).

Refer to the Figure Above