The Efficient Amount of Pollution in Society

question 53

Multiple Choice

The efficient amount of pollution in society:

• A)is zero.
• B)occurs when the detriment to society from every unit of pollution emitted is taken into account appropriately and remedies are created such that the supply curve for each industry is fully reflective of all marginal social costs.
• C)is impossible to calculate and therefore it is probably better to set maximum limits for pollution output for each firm in industries that pollute in proportion to their profits.
• D)is achieved without the government setting any emissions standards because the market equilibrium will coincide with the social optimum in the absence of intervention.

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Definitions:

Stockholders' Equity

The ownership interest of shareholders in the assets of a corporation, calculated as total assets minus total liabilities.

Accounts Payable

Amounts a company owes to suppliers or creditors for goods and services received but not yet paid for, recorded as a liability.

Supplies

Items that are used in the day-to-day operation of a business but do not directly relate to the goods or services sold.

Balance Sheet

A financial statement that provides a snapshot of what a company owns (assets), owes (liabilities), and the value of shareholders' equity at a specific point in time.