Following Questions are based on the following information.
In a small city located on a lake,the raw sewage of the city is dumped directly into the lakE.This has been a source of distress for citizens who like to swim,fish,and water ski.A study has been instituted to determine what value the citizens place on pollution control,and the results are listed in the following tablE.Costs of pollution control are also listed.

-The marginal social cost of the fourth unit of pollution control is
A)Zero
B)$30,000
C)$90,000
D)$100,000
E)$120,000

Question

Following Questions are based on the following information.
In a small city located on a lake,the raw sewage of the city is dumped directly into the lakE.This has been a source of distress for citizens who like to swim,fish,and water ski.A study has been instituted to determine what value the citizens place on pollution control,and the results are listed in the following tablE.Costs of pollution control are also listed.
 
-The marginal social cost of the fourth unit of pollution control is
A)Zero 
B)$30,000 
C)$90,000 
D)$100,000 
E)$120,000

Quizplus · Accepted Answer

The marginal social benefit of the fourth unit of pollution control is $90,000 (the difference between the total benefit of $540,000 and the total benefit of $450,000 with only three units of pollution control). The marginal social cost of the fourth unit of pollution control is $30,000. Therefore, choosing to implement the fourth unit of pollution control would result in a net gain of $60,000 ($90,000 - $30,000). Choosing to implement all four units of pollution control would result in a net gain of $50,000 ($540,000 - $490,000), so the best choice would be to implement only the fourth unit of pollution control.

Following Questions Are Based on the Following Information