Suppose That, at the Current Level of Pollution, the Marginal

question 30

Multiple Choice

Suppose that, at the current level of pollution, the marginal abatement cost is $30,000 and the marginal cost of pollution is $80,000. This economy is producing:

• A) an efficient level of pollution if the total cost of pollution is $50,000.
• B) too little pollution and should increase its pollution level.
• C) too much pollution and should reduce its pollution level.
• D) an efficient level of pollution if the marginal cost of pollution is $110,000.

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Definitions:

Dumping

The practice of a company selling a product in a foreign market at a price lower than its cost of production or lower than the price in its domestic market.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, leading to more efficient international trade.

Economics

The study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided.

Efficiency

The condition in which the economy is producing what people want at least possible cost.