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.

-The economically efficient level of pollution control is
A)10 units
B)9 units
C)8 units
D)4 units
E)2 units

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.
 
-The economically efficient level of pollution control is
A)10 units 
B)9 units 
C)8 units 
D)4 units 
E)2 units

Quizplus · Accepted Answer

The economically efficient level of pollution control is where the marginal cost of pollution control equals the marginal benefit of pollution control.

At 8 units of pollution control, the marginal benefit is $600 and the marginal cost is $600, which is the same, thus making it economically efficient.

At 9 or 10 units of pollution control, the marginal cost is higher than the marginal benefit, so it would not be economically efficient to choose those options.

At 4 or 2 units of pollution control, the marginal benefit is higher than the marginal cost, so it would be economically efficient to choose those options, but they are not the best choice since they do not fully satisfy the citizens' preferences for pollution control.

Therefore, the best choice is C) 8 units of pollution control, which is both economically efficient and also satisfies the citizens' preferences for pollution control to a significant extent.

Following Questions Are Based on the Following Information