Much of the Nation's Coal Is Extracted by Strip Mining

question 1

Multiple Choice

Much of the nation's coal is extracted by strip mining. This process leaves a huge barren hole in the ground when complete, and the cost of replanting the trees is approximately $10 per ton of coal. Burning the coal for electricity causes air pollution. No one knows how much damage the air pollution causes, but we know that for another $10 per ton the power plant can be outfitted with a pollution control device. What is one measure of the true social cost of coal fired electricity, in dollars per ton?

• A) Private marginal cost plus the $10 replanting charge.
• B) Private marginal cost plus the $10 emission control charge.
• C) Only the $20 of replanting and emission control charges, because the other costs are private, not social.
• D) Private marginal cost plus the $20 of replanting and emission control charges.

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