Figure 5-8
Consider a chemical plant that discharges toxic fumes over a nearby community. To reduce the emissions of toxic fumes the firm can install pollution abatement devices. Figure 5-8 shows the marginal benefit and the marginal cost from reducing the toxic fumes emissions.
-Refer to Figure 5-8. Suppose the emissions reduction target is currently established at 8 million tons. Should society undertake to reduce an additional 1 million tons so that the total reduction is 9 million tons?
A) No, because there is a net cost represented by the area B + C.
B) Yes, because the marginal benefit exceeds the marginal costs.
C) Yes, because toxic fumes are dangerous and must be eliminated at any cost.
D) No, because the firms will pass the additional cost on to consumers.
Correct Answer:
Verified
Q120: If the paint on your house was
Q120: Assume that air pollution from a copper
Q122: Should the level of pollution be reduced
Q124: In economics, the optimal level of pollution
Q127: If there is pollution in producing a
Q128: Congressman Murphy made the following proposal: "We
Q131: Suppose a negative externality exists in a
Q132: If transactions costs are low, private bargaining
Q136: What are transactions costs? Why do transactions
Q137: Ronald Coase is famous for the Coase
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents