Suppose That the MSB and MSC of Abating Sulfur Dioxide

question 41

Essay

Suppose that the MSB and MSC of abating sulfur dioxide are as follows. Use these functions to answer parts (a) and (b) below.
MSB = 32 - 0.2A MSC = 16 + 0.2A
a. Because the NAAQS are set using a benefit-based decision rule, find the abatement level of sulfur dioxide that would adhere to this rule.
b. If instead the NAAQS were legislated to achieve efficiency, find the efficeint abatement level (A_E) for sulfur dioxide.

---

Definitions:

Id

A term from psychoanalytic theory referring to the part of the psyche associated with instinctual impulses and demands for immediate satisfaction of basic needs.

Conscience

An inner feeling or voice viewed as acting as a guide to the rightness or wrongness of one's behavior.

Superego

In psychoanalytic theory, the part of the personality responsible for moral standards and self-criticism.

Reality Principle

The recognition, characterizing ego functioning, that we cannot always express or satisfy our id impulses.