Question :
31) When considering an entire industry, the marginal benefit of : 1384320
31) When considering an entire industry, the marginal benefit of reducing pollution is expected
A) to rise as the level of pollution gets closer to zero.
B) to remain constant for all levels of pollution control.
C) to exceed the marginal cost of pollution abatement for all positive levels of pollution.
D) to fall as the amount of pollution abatement rises.
E) to be always greater than the marginal cost of pollution reduction.
32) Consider an oil company extracting oil from the Tar Sands in Northern Alberta. The production process generates greenhouse-gas emissions. At the socially efficient level of oil extraction,
A) the level of emissions will be zero.
B) the marginal cost of the emissions will be equal to the social marginal benefit derived from the extracted oil.
C) the marginal cost of the emissions will be more than the social marginal benefit derived from the extracted oil.
D) the social marginal cost of the oil extraction will be equal to its social marginal benefit.
E) the social marginal cost of the oil extraction will exceed its social marginal benefit.
33) Refer to Figure 17-2. The allocatively efficient level of production and use of disposable diapers is
A) Q0, because that is where MCS exceeds MCP.
B) Q0, because that is where MCS equals MBS.
C) Q1, because that is where MCP equals MBS.
D) Q1, because that is where MCS equals MBS.
E) Q2, because that is where the externality is internalized.
34) Refer to Figure 17-2. The net social benefit derived from the production and use of disposable diapers is
A) at a minimum at Q0, because MCS exceeds MCP.
B) at a maximum at Q0, because that is where MCS equals MBS.
C) at a maximum at Q1, because that is where MCS equals MBS.
D) zero at Q0, because that is where MCS equals MBS.
E) zero at Q2, because that is where the externality is internalized.
35) Refer to Figure 17-2. The net social benefit derived from the production and use of the last unit of disposable diapers is
A) at a minimum at Q0, because MCS exceeds MCP.
B) at a maximum at Q0, because that is where MCS equals MBS.
C) at a maximum at Q1, because that is where MCS equals MBS.
D) zero at Q0, because that is where MCS equals MBS.
E) zero at Q2, because that is where the externality is fully maximized.
36) Refer to Figure 17-3. The MB curve in this diagram is downward sloping because
A) the marginal benefit from a given amount of abatement will be lower, the lower the level of pollution.
B) the marginal cost of additional units of pollution abatement is decreasing.
C) the marginal damage generated by additional units of pollution is decreasing.
D) the marginal benefit from a given amount of abatement will be higher, the higher the level of pollution abated.
E) the marginal cost of additional units of pollution abatement increases as pollution abatement increases.
37) Refer to Figure 17-3. The MC curve in this diagram is upward sloping because
A) the marginal benefit from a given amount of abatement will be lower, the lower the level of pollution.
B) the marginal cost of additional units of pollution abatement is decreasing.
C) the marginal damage generated by additional units of pollution is decreasing.
D) the marginal benefit from a given amount of abatement will be higher, the higher the level of pollution abated.
E) the marginal cost of additional units of pollution abatement increases as the total amount of remaining pollution declines.
38) Refer to Figure 17-3. On the horizontal axis, the label “Qt(100% abatement)” refers to
A) the maximum pollution abatement that is cost effective.
B) the maximum pollution abatement attainable at the lowest cost.
C) the maximum pollution abatement attainable with given technology.
D) zero remaining pollution.
E) zero pollution abatement.
39) Refer to Figure 17-3. The socially optimal amount of pollution is
A) + Qt.
B) Qt – .
C) .
D) Qt.
E) 0.
40) The marginal benefit of reducing pollution and the marginal cost of reducing pollution are given by the following equations: MB = -2 + 18, and MC = 2 + 2, where U is the number of units of pollution abatement. What is the optimal level of pollution abatement?
A) 0
B) 1
C) 2
D) 3
E) 4
