Figure 9.6 -A Firm That Generates Pollution Is Illustrated in Figure 9.6

question 4

Multiple Choice

Figure 9.6
-A firm that generates pollution is illustrated in Figure 9.6. The government has chosen to impose a pollution tax equal to P2. From the firmʹs point of view, the marginal benefit of abatement is

• A)avoiding the pollution tax imposed by the government.
• B)the positive publicity the firm will receive by having a ʺgreenʺ production plant.
• C)the reciprocal of the marginal cost of abatement.
• D)zero because abatement benefits the general public, not the firm.

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Definitions:

Unemployment

The situation in which individuals who are capable of working and actively seeking work are unable to find employment.

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The complete range of goods and services that enterprises in an economy are prepared to sell over a predetermined period.

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