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.

-At the economically efficient level of control,MSB
A)Equals MSC
B)Equals $30,000
C)Is lower than at one unit less pollution control
D)Is higher than at one unit more pollution control
E)Is all of the above

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.
 
-At the economically efficient level of control,MSB
A)Equals MSC 
B)Equals $30,000 
C)Is lower than at one unit less pollution control 
D)Is higher than at one unit more pollution control 
E)Is all of the above

Quizplus · Accepted Answer

At the economically efficient level of control, the Marginal Social Benefit (MSB) equals the Marginal Social Cost (MSC), which is a condition for economic efficiency. The specific value of $30,000 is arbitrary without context but could be correct in a given scenario. The MSB being lower at one unit less pollution control and higher at one unit more pollution control reflects the principle that at the efficient level, any deviation results in a less optimal allocation of resources, either by reducing benefits more than costs or increasing costs more than benefits. Therefore, all of the statements are correct in the context of economic efficiency in pollution control.

Following Questions Are Based on the Following Information