Question

1 pts Suppose a city releases 16 million gallons of raw sewage into a nearby lake. The table below shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits include environmental, recreational, health, and industrial benefits. Using the information in the table, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. What is the optimal level of sewage for this city? Total Cost Total Benefits (in thousands of dollars) (in thousands of dollars) 16 million gallons Current situation Current situation 12 million gallons 50 800 8 million gallons 150 1300 4 million gallons 500 1650 O gallons 1200 1800 8 million gallons 12 million gallons 4 million gallons

Answer 1

1) optimal quantity of sewage is defined when marginal social benefit( MSB) equals to marginal social cost(MSC)

And in the given table,

MSB = MSC = 350 when sewage is 4 million gallons.

So, option C is correct.

45) command and control policy is the policy in which the particular works or formalities are mandated by the legislature.

So, in the given the mandated is option A.

Hence, option A is correct.

43) externality is defined as the consumption or production done by any party, which effects the third party also is called externality.

There can be two types of externality. Both negative and positive.

A positive externality is when marginal social benefit is more than private benefits.

a negative externality is when social cost is more than private cost.

So, option C is correct.

31) monopoly market is in which there is only one seller

And that seller have the control over price making.

So, monopoly is price maker, not price taker

Hence, option A is the answe.