Pollution damages the environment we live in. When would an economist advise that we reduce air pollution?
A) when air pollution is in excess of the levels experienced in the 1950s, when air was much cleaner near big cities
B) when the total benefit from air pollution reduction just equals the total cost of pollution reduction
C) when air pollution levels are above near-zero levels
D) when the marginal benefit from air pollution reduction outweighs the marginal cost of achieving the reduction

Question

Quizplus · Accepted Answer

An economist would advise reducing air pollution when the marginal benefit from air pollution reduction outweighs the marginal cost of achieving the reduction. This means that the benefits of reducing pollution, such as improved health and environmental quality, would be greater than the costs of implementing pollution-reducing measures. Choices A and C provide arbitrary levels of pollution as a benchmark, while choice B only recommends pollution reduction if benefits and costs are equal, which would not necessarily be optimal.

Pollution Damages the Environment We Live In