Figure 5-7 -Refer to Figure 5-7. Which of the Following Statements Is

question 1

Multiple Choice

Figure 5-7
-Refer to Figure 5-7. Which of the following statements is true?

• A) At QE the benefits of reducing pollution outweighs the cost of pollution reduction.
• B) At QB society is under allocating resources to pollution reduction.
• C) The optimal quantity of pollution reduction is QB.
• D) The optimal quantity of pollution reduction is QE.

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Definitions:

Nonlabor Resources

Nonlabor resources refer to the materials, capital, land, and technology used in the production of goods and services, distinct from human labor.

Output

The total amount of goods or services produced by a business, industry, or economy during a given period.

Average Total Costs

The total cost of production (fixed plus variable costs) divided by the total quantity of output, indicating the cost per unit of output.

Variable Costs

Costs that change in proportion to the level of output or activity.