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Figure: Efficiency and Pollution
-(Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution. If the government imposed an environmental standard that did not allow the quantity of pollution to exceed 20 tons, there would be:
A) a socially optimal quantity of pollution.
B) too little pollution, because its marginal social benefit would exceed its marginal social cost.
C) too much pollution, because its marginal social cost would exceed its marginal social benefit.
D) too much pollution, because any pollution is too much from an economist's perspective.

Question

Use the following to answer questions:
Figure: Efficiency and Pollution 
-(Figure: Efficiency and Pollution) Look at the figure Efficiency and Pollution. If the government imposed an environmental standard that did not allow the quantity of pollution to exceed 20 tons, there would be:
A) a socially optimal quantity of pollution. 
B) too little pollution, because its marginal social benefit would exceed its marginal social cost. 
C) too much pollution, because its marginal social cost would exceed its marginal social benefit. 
D) too much pollution, because any pollution is too much from an economist's perspective.

Quizplus · Accepted Answer

If the pollution is limited to 20 tons, the marginal social benefit of pollution would exceed the marginal social cost, indicating too little pollution.

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