In Order to Minimize the Net Cost of Pollution Reduction

question 30

Multiple Choice

In order to minimize the net cost of pollution reduction, the level of pollution reduction (the amount of a pollutant not released into the environment) should be the level at which

• A) the marginal benefit of reducing pollution exeeds the marginal cost of reducing pollution by the greatest possible amount.
• B) the total benefit of reducing pollution equals the total cost of reducing pollution.
• C) the marginal benefit of reducing pollution equals the marginal cost of reducing pollution.
• D) the total cost of reducing pollution is minimized and the total benefits of reducing pollution are maximized.

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Definitions:

Sales

The total revenue earned from the selling of goods or services, before any deductions are made.

Charge Customer

To bill a customer for goods or services provided, thereby creating an account receivable.

Cash Discount

A deduction from the invoice price that is allowed if payment is made within a specified period.

Credit

An accounting entry recording an increase in liabilities or equity or a decrease in assets, opposite of a debit.