Economic Analysis of the Optimal Amount of Pollution Is Typically

question 67

Multiple Choice

Economic analysis of the optimal amount of pollution is typically done in terms of the amount of pollution abated,as opposed to the amount of pollution produced.Why?

• A)Because it is more practical to measure the marginal costs of pollution abated than of pollution produced.
• B)Because governments and environmental authorities can produce more reliable data on pollution abated than pollution produced,which facilitates the economic analysis.
• C)Because the abatement of pollution is a "good" to which we can more easily apply the concepts of supply and demand.
• D)Because there are no marginal benefits of pollution produced,so it is necessary to study pollution abated in order to equate marginal benefits and marginal costs.
• E)All of the above are correct.

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Definitions:

1980s

A decade characterized by major economic, political, and technological changes around the world, including the acceleration of the digital revolution and the end phase of the Cold War.

Savings Rate

The proportion of disposable income that individuals or households save rather than spend.

Consumption

The use of goods and services by households, constituting one of the primary components of gross domestic product (GDP).

China

A country in East Asia, the world's most populous nation, with a long history, rich culture, and significant economic influence.