Refer to the Figure Above

question 23

Multiple Choice

Refer to the Figure above. MAC₁ represents a mis-estimation of abatement costs. True abatement costs are MAC₂; however, the regulatory agency believes that the costs are represented at MAC₁ and sets policy accordingly. Due to this error, emissions are ________ than the socially efficient level and damages are ___________ than the socially efficient level.

• A) lower; lower
• B) lower; higher
• C) higher; lower
• D) higher; higher

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Definitions:

McCreary

Likely refers to McCreary County v. ACLU of Kentucky, a significant U.S. Supreme Court case dealing with the Establishment Clause and religious displays on public property.

Van Orden

Refers to Van Orden v. Perry, a U.S. Supreme Court case dealing with the display of the Ten Commandments on public property.

Establishment Clause

A clause in the First Amendment of the U.S. Constitution that prohibits the government from making any law respecting an establishment of religion, thereby ensuring the separation of church and state.

New York Times

A prominent American newspaper and media company known for its comprehensive news coverage, including politics, international affairs, and culture.