When Using Pollution Charges to Improve Efficiency in a Market

question 134

Multiple Choice

When using pollution charges to improve efficiency in a market with an external cost,regulators attempt to set the pollution charge equal to the

• A) marginal social cost of production.
• B) marginal external cost of production.
• C) marginal private cost of production.
• D) marginal private benefit of consumption.
• E) marginal external benefit minus the marginal external cost.

---

Definitions:

Genes

The basic physical and functional units of heredity, made up of DNA, that determine the characteristics of an organism.

Environment

encompasses all the external physical and biological factors influencing an organism or community, including natural and built environments.

Sick Role Model

A theoretical model that outlines the rights, obligations, and behaviors expected of individuals who are acknowledged as legitimately ill in society.

Illegal Drug User

A person who uses substances that are forbidden by law due to their potential for abuse and harm.