Refer to the diagram. Which one of the following might shift the marginal beneﬁt curve from MB1 to MB2?
A) major new studies strongly linking cancer to pollution
B) improved technology for reducing pollution
C) a change in consumer tastes from manufactured goods to services
D) a decrease in the price of recycled goods

Question

Refer to the diagram. Which one of the following might shift the marginal beneﬁt curve from MB1 to MB2?
A) major new studies strongly linking cancer to pollution 
B) improved technology for reducing pollution 
C) a change in consumer tastes from manufactured goods to services 
D) a decrease in the price of recycled goods

Quizplus · Accepted Answer

Major new studies strongly linking cancer to pollution would increase the perceived harm from pollution and therefore increase the marginal benefit of reducing pollution, thus shifting the marginal benefit curve from MB1 to MB2. Improved technology for reducing pollution (B) would shift the marginal cost curve downward but would not directly affect the marginal benefit curve. A change in consumer tastes (C) would not directly affect the marginal benefit of reducing pollution. A decrease in the price of recycled goods (D) would shift the marginal cost curve downward, but would not directly affect the marginal benefit curve.

Refer to the Diagram