If Pollution Is Reduced Below the Socially Efficient Level

question 153

Multiple Choice

If pollution is reduced below the socially efficient level:

• A)​the marginal cost of pollution abatement exceeds the marginal benefit of pollution abatement.
• B)​the marginal cost of pollution abatement is less than the marginal benefit of pollution abatement.
• C)​the marginal cost of pollution abatement equals the marginal benefit of pollution abatement.
• D)​nothing can be said about the relationship between the marginal cost and marginal benefit of pollution abatement.

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Definitions:

Dividends Payable

This is a liability on the balance sheet representing the amount of dividends that a corporation has declared but not yet paid to its shareholders.

Current Liability

A company's debt or obligations that are due within one year.

Cumulative Preferred Stock

A type of preferred stock that accrues dividends if they are not paid in the year they are due, prioritizing these payment backlogs for future distribution.

Par Value

A nominal value assigned to shares of stock by the issuing company, which is the minimum price at which shares can be issued, often used for legal capital purposes.