The Economist's View That Complete Elimination of Pollution Is Undesirable

question 164

Multiple Choice

The economist's view that complete elimination of pollution is undesirable stems from

• A) indifference to social problems.
• B) too much emphasis on profit maximization.
• C) an inability to model the problem.
• D) a comparison of the marginal benefit to the marginal cost.
• E) a belief that pollution is desirable.

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Definitions:

Operating Income

A measure of a company's earning power from ongoing operations, equal to revenues minus operating expenses, but before taxes and interest.

Margin Of Safety

Indicates the possible decrease in sales that may occur before an operating loss results.

Variable Costs

Costs that change in proportion to the level of activity or production volume.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums, remaining constant regardless of activity levels.