Question 14) Which of the following statements concerning pollution is correct?

14) Which of the following statements concerning pollution is correct?

A) Economic efficiency requires that pollution be completely eliminated.

B) Economic efficiency dictates that the optimal amount of pollution arises at the point at which

price equals private marginal cost.

C) Pollution should be reduced to the point at which the marginal benefit from further reduction

equals the marginal cost of further reduction.

D) Pollution should be reduced to the extent necessary to return production to the production

possibilities frontier.

15) In economic analysis, the optimal level of pollution

A) is always zero.

B) arises at the point at which the marginal benefit from further reduction equals the marginal

cost of further reduction.

C) occurs at the point at which demand crosses the private cost supply curve.

D) should be determined by the private market without any government intervention.

16) From an economic standpoint, the amount of pollution should be

A) zero.

B) the amount that allows firms to maximize profits.

C) the amount where firms are earning a normal rate of return on investment.

D) at the point at which the marginal benefit from further reduction equals the marginal cost of

further reduction.

17) The optimal amount of pollution is not zero because

A) it has been found that pollution in moderate amounts actually has positive benefits.

B) there are no benefits to anyone from having zero pollution.

C) zero pollution would be too costly.

D) we don’t have the political structure that could accomplish the goal.

18) The marginal benefit of pollution abatement

A) increases at an increasing rate as abatement increases.

B) decreases as pollution abatement increases because of the law of diminishing marginal utility.

C) increases as pollution abatement increases because of the law of increasing marginal returns.

D) is constant as pollution abatement increases.

19) The costs of pollution abatement

A) increase at an increasing rate with the increase in pollution abatement.

B) increase at a decreasing rate with the increase in pollution abatement.

C) decrease at an increasing rate with the increase in pollution abatement.

D) decrease at a decreasing rate with the increase in pollution abatement.

20) Refer to the above figure. The marginal cost of pollution abatement is curve

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