100 The ideal policymaker's indifference curves Slope: MRS E* 62 Feasible set Feasible frontier Slope: MRT E with zero abatement 450 500 Abatement costs = €50 billion Consumption of goods and services (billions €) Quality of the environment, E

100 The ideal policymaker's indifference curves Slope: MRS E* 62 Feasible set Feasible frontier Slope: MRT E with zero abatement 450 500 Abatement costs = €50 billion Consumption of goods and services (billions €) Quality of the environment, E

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In the following figure, the optimal choice maximises social value. This occurs where

A) MRS > MRT

B) MRT > MRS

C) MRT = MRS

D) There is not enough information to determine optimal point.

100
The ideal policymaker's
indifference curves
Slope: MRS
E* 62
Feasible set
Feasible frontier
Slope: MRT
E with zero
abatement
450
500
Abatement costs = €50 billion
Consumption of goods and services (billions €)
Quality of the environment, E

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