An Environmental Economic Consulting Firm Is Hired to Measure the Negative

question 62

Multiple Choice

An environmental economic consulting firm is hired to measure the negative externalities associated with the pollution from an industry. The consultants calculate the marginal social cost of production to be $M S C = 2 Q + 30$ and the marginal private cost of production to be $M P C = Q$ $+ 30$ . The market demand curve can be expressed as $P = 60 - Q$ . If the consultants have accurately measured the impact of the pollution externality, the cost of the externality at the market equilibrium (i.e. where the externality is not taken into account in production decisions) is

• A) \(\$ 0\).
• B) \(\$ 112.5\).
• C) \(\$ 150\).
• D) \(\$ 250\).

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Definitions:

ADHD

Attention-Deficit/Hyperactivity Disorder, a brain disorder marked by an ongoing pattern of inattention and/or hyperactivity-impulsivity that interferes with functioning or development.

Impulsivity

Refers to the tendency to act quickly without careful thought or consideration of the consequences.

Methamphetamine Dependence

A strong physical and psychological dependence on the stimulant drug methamphetamine, characterized by the compulsive need to use despite harmful consequences.

Methylphenidate (Ritalin)

The most frequently prescribed stimulant medication for children with attention deficit hyperactivity disorder (ADHD).