Figure: the Optimal Quantity of Pollution (Figure: the Optimal

question 99

Multiple Choice

Figure: The Optimal Quantity of Pollution (Figure: The Optimal Quantity of Pollution) The figure The Optimal Quantity of Pollution shows the marginal social cost (MSC) and marginal social benefit (MSB) for firms that pollute the air with sulfur dioxide.Using the figure, the optimal Pigouvian tax per unit of pollution is:

• A)$500.
• B)$250.
• C)$167.
• D)$83.

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Definitions:

Geologic Cross Section

A diagram or representation showing the vertical profile of the Earth's crust to illustrate the positions of rock layers and structures.

Fossil Fuels

Natural fuels formed from the remains of living organisms, such as coal, oil, and natural gas.

Gas Hydrate

An icelike solid mixture of water and a natural gas, usually methane.

Coal-bed Methane

A type of natural gas extracted from coal beds, often used for heating and generating electricity.