Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?
A)Does the intervention program reduce pollution to zero using the least costly method?
B)Is the intervention program economically efficient?
C)Does the intervention program make the amount of economic surplus as large as possible?
D)Is the damage to the environment from government intervention as small as possible?

Question

Quizplus · Accepted Answer

While reducing pollution to zero may be desirable from an environmental perspective, it may not be economically feasible or efficient. Maximizing economic surplus may also not align with environmental protection. The best choice is to determine if the intervention program is economically efficient, meaning that the benefits of reduced pollution outweigh the costs of intervention, and that the intervention is effective in achieving its intended environmental goals. Minimizing damage to the environment should also be considered, but it is secondary to the goal of achieving economic efficiency.

Which of the Following Criteria Should Be Used to Evaluate