An Environmental Economic Consulting Firm Is Hired to Measure the Negative

question 52

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 deadweight loss from producing at the market equilibrium is:

• A) \(\$ 30\)
• B) \(\$ 37.5\).
• C) \(\$ 55\).
• D) \(\$ 67.5\).

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Definitions:

Austrian Physician

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Wilhelm Wundt

Wilhelm Wundt was a German physiologist, philosopher, and professor, known as one of the founders of modern psychology, who established the first psychology laboratory at the University of Leipzig in 1879.

Humanistic Psychology

Humanistic psychology is an approach to psychology that emphasizes individual potential for growth and the importance of self-actualization and psychological well-being.

Cognitive Psychology

The branch of psychology that studies mental processes including how people think, perceive, remember, and learn.