Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 24

Suppose that the government is considering a policy that will result in cleaner, safer drinking water. Specifically, the policy targets the amount of arsenic in drinking water supplies. Arsenic is a naturally occurring element that also happens to be the active ingredient in rat poison. Most drinking water has a bit of arsenic in it. Sometimes, that arsenic kills people. Current standards mandate that no supply of drinking water may have greater than 50 parts per billion (ppb) arsenic. The proposed standard would remove 80% of that arsenic, reducing tolerance levels to 10 ppb arsenic, You are an economist who has been called in to help decide whether this policy is a good ide
a. Explain the process you will use. What questions will you need to ask to reach a conclusion?