Refer to the figure above.Suppose that MD_u represents the damages associated with ambient levels of benzene in an urban area and MD_r represents those same damages in a rural area.If the ambient emission standard is set at e_u_,the standard yields a (n) _________ level of pollution in urban areas but is unnecessarily ____________ for rural areas.

Question

Quizplus · Accepted Answer

The standard e_u is socially efficient for urban areas because it aligns with the marginal damages (MD_u) there. However, it is unnecessarily strict for rural areas because the damages (MD_r) are lower, meaning a less stringent standard could suffice.

Refer to the Figure Above