The table below shows the marginal benefit and marginal cost of pollution abatement for an economy.
TABLE 17-1
-Refer to Table 17-1.Suppose a public authority has the mandate to maximize social welfare by choosing the appropriate amount of pollution abatement.The optimal amount of pollution abatement is ________ units and implies a ________ amount of pollution remaining.

Question

The table below shows the marginal benefit and marginal cost of pollution abatement for an economy.
  TABLE 17-1
-Refer to Table 17-1.Suppose a public authority has the mandate to maximize social welfare by choosing the appropriate amount of pollution abatement.The optimal amount of pollution abatement is ________ units and implies a ________ amount of pollution remaining.

Quizplus · Accepted Answer

The optimal amount of pollution abatement is where marginal benefit equals marginal cost. This occurs at 5 units of pollution abatement, where the marginal benefit is 20 and the marginal cost is also 20. At this level of abatement, there is still some pollution remaining (10 units), which is a positive amount. Therefore, the answer is C: 5 units of pollution abatement and a positive amount of pollution remaining.

The Table Below Shows the Marginal Benefit and Marginal Cost