Use the following to answer questions:
-(Table: Coal Mine Pollution) The table Coal Mine Pollution shows the marginal social benefit and cost of various amounts of pollution from a coal mine. If 2 tons of pollution is produced, the outcome is _____ because _____.

Question

Use the following to answer questions: 
-(Table: Coal Mine Pollution) The table Coal Mine Pollution shows the marginal social benefit and cost of various amounts of pollution from a coal mine. If 2 tons of pollution is produced, the outcome is _____ because _____.
A) efficient; MSB = MSC 
B) efficient; MSB > MSC 
C) inefficient; MSB > MSC 
D) inefficient; MSB < MSC

Quizplus · Accepted Answer

The outcome is inefficient because the marginal social benefit (MSB) is greater than the marginal social cost (MSC), indicating that the level of pollution is higher than the socially optimal level.

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