An Environmental Economic Consulting Firm Is Hired to Measure the Negative

question 35

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 MSC = 2Q+30 and the marginal private cost of production to be +30.The market demand curve can be expressed as 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.

---

Definitions:

Processing Time

The amount of time taken to complete a particular process, task, or operation.

Same Day Value

Bank makes proceeds of cheques deposited available the same day before cheques clear.

Cheques Deposited

The process of placing cheques received into a bank account to be processed and the funds credited to the account holder.

Clear

To settle a trade or transaction by exchanging financial instruments or the legal process of resolving a dispute.