The Marginal Benefit of Reducing Pollution and the Marginal Cost

question 110

Multiple Choice

The marginal benefit of reducing pollution and the marginal cost of reducing pollution are given by the following equations: MB = -2U² + 18,and MC = 2U² + 2,where U is the number of units of pollution abatement.What is the number of units of pollution abatement after which there is no further social benefit from reducing pollution?

• A)0
• B)1
• C)2
• D)3
• E)4

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Definitions:

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a common set of accounting rules and standards for financial reporting.

Provision

A financial accounting term referring to setting aside an amount in the books to cover a presumed future liability or loss.

Adjustment Needed

A modification required to correct an accounting record or financial statement to accurately reflect the financial position of an entity.

IFRS Financial Statements

Financial statements prepared in accordance with International Financial Reporting Standards, which provide a global framework for how public companies prepare and disclose their financial statements.