In the Figure Below, If the Marginal Damages Line Did

question 4

Multiple Choice

In the figure below, if the marginal damages line did not originate at 0,

• A)there is no way to find SMC.
• B)SMC would not originate at the same intercept as PMC.
• C)it would mean that marginal damages did not exist.
• D)all of these answers are correct.

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Definitions:

Inequitable

Refers to a lack of fairness or justice in a situation or distribution of resources.

Public Goods

Commodities or services that are provided without profit to all members of a society, either by the government or a private individual or organization.

External Costs

Costs incurred as a result of an economic activity that are not reflected in the market price, often shouldered by society or the environment.

Unemployment

A situation where individuals who are able and willing to work are not able to find employment.