If the MSB function for some measure of environmental quality were known, the change in TSB associated with a policy initiative could be measured by the area under the MSB between the pre- and post-abatement levels.

Question

Quizplus · Accepted Answer

This statement is true because the MSB (marginal social benefit) function measures the change in societal welfare associated with a change in environmental quality. Therefore, the area under the MSB curve between the pre- and post-abatement levels would give an estimation of the change in TSB (total social benefit) associated with a policy initiative.

If the MSB Function for Some Measure of Environmental Quality