Econometric Studies Show a Hump-Shaped Relationship Between Income Levels and Pollution

question 83

Multiple Choice

Econometric studies show a hump-shaped relationship between income levels and pollution levels. Which of these statements reflects that relationship?

• A) As an economy grows and income levels rise, initially pollution levels also rise.
• B) Decreasing income levels lead to an increase in pollution levels.
• C) As an economy grows, pollution levels show a constant increase.
• D) Economies that are in turmoil reflect pollution levels that are diminishing.
• E) Income levels do not have any correlation with pollution levels.

---

Definitions:

Acceptance

The act of receiving or approving something, often used in the context of agreements or contracts.

Differential Cost

The difference in cost between two alternative decisions or scenarios, impacting the selection of one option over another.

Differential Cost

is the change in a company's cost of producing goods or services under two different action alternatives, essentially the cost difference between two choices.

Unused Capacity

The available but not utilized production ability of a company which could potentially generate revenue if employed.