6907 JO inQuestion 20 of 20 >The graph shows the marginal social benefit curve (MSB) andMSB/MSCmarginal social cost curve (MSC) of pollution emissions.MSCFor the 1st unit of pollution emissions, the MSB is$62greater thanthe MSC.5435Determine the socially optimal quantity ofpollution emissions.15.MSB4523.Quantity of pollution emissions (tons)19pollution emissions:tons4.Activate WindowsGo to Settings to activate VWill a market economy, without any governmentLAPTOP LOGINHIGH DEFINITION EUSERNAME: studentPASSWORD: Broward1TravelMate BF12PrtScPauF8F10Scr LkSysRqBrF5NumLk8.8.66%0

Answers (1) For the first unit of pollution marginal social benefit is greater than marginal social cost. This is because at the pollution level of 1 unit, the marginal social benefit curve ( red curve) is above the marginal social cost curve ( green curve). Answer is Greater than(2) We get the socially optimal quantity of pollution emissions by finding the point of intersection of marginal social cost curve and marginal social benefit curve. This happens at the quantity of 45 tons, hence, 45 tons is the socially optimal quantity. Answer is 45 tons(3) No, it will produce more. When there is no government intervention there will be more pollution than the socially optimal level. This is because the marginal private cost of pollution is less than the marginal social cost of pollution. As a result the intersection between marginal private cost of pollution and marginal social benefit of pollution is greater than 45 tons. Hence, when there is no government intervention, there will be more pollution than the socially optimal level.

Answered: 1 shows the marginal social benefit…

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Economics

1 shows the marginal social benefit curve (MSB) and social cost curve (MSC) of pollution emissions.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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