Question

The graph below shows the marginal social benefit and marginal social cost of pollution. a. (1 pt) What is the optimal level of pollution shown on the graph? b. (1 pt) Would a new regulation that resulted in the level of pollution shown by Q3 be considered too lenient? Please explain. c. (1 pt) Would the dollar amount of the Pigovian tax necessary to make this market operate efficiently be $10, $40, $50, $60, or $100? d. (1 pt) If new research indicated that the negative effects of a this pollutant were worse that we had though which of the curves would shift, and in what direction? $ 100 MSC 60 50 10 MSB Q1 Q2 Q3 Q of Pollution

          The graph below shows the marginal social benefit and marginal social cost of pollution.
a. (1 pt) What is the optimal level of pollution shown on the graph?
b. (1 pt) Would a new regulation that resulted in the level of pollution shown by Q3 be
considered too lenient? Please explain.
c. (1 pt) Would the dollar amount of the Pigovian tax necessary to make this market
operate efficiently be $10, $40, $50, $60, or $100?
d. (1 pt) If new research indicated that the negative effects of a this pollutant were worse
that we had though which of the curves would shift, and in what direction?
$
100
MSC
60
50
10
MSB
Q1 Q2 Q3
Q of Pollution

The graph below shows the marginal social benefit and marginal social cost of pollution.
a. (1 pt) What is the optimal level of pollution shown on the graph?
b. (1 pt) Would a new regulation that resulted in the level of pollution shown by Q3 be
considered too lenient? Please explain.
c. (1 pt) Would the dollar amount of the Pigovian tax necessary to make this market
operate efficiently be 10,40, 50,60, or 100?
d. (1 pt) If new research indicated that the negative effects of a this pollutant were worse
that we had though which of the curves would shift, and in what direction?
100
MSC
60
50
10
MSB
Q1 Q2 Q3
Q of Pollution

Added by Frank G.

Question

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