43. A city currently emits 16 million gallons (MG) ofraw sewage into a lake that is beside the city. Table12.13 shows the total costs (TC) in thousands of dollarsof cleaning up the sewage to different levels, togetherwith the total benefits (TB) of doing so. Benefits includeenvironmental, recreational, health, and industrialbenefits.TCTB16 MGCurrentCurrent12 MG508008 MG15013004 MG5001850O MG12002000Table 12.13a. Using the information in Table 12.13 calculatethe marginal costs and marginal benefits ofreducing sewage emissions for this city.b. What is the optimal level of sewage for this city?How can you tell?

Solution 43) Consider the above given that Total Cost(TC) Total benefit(TB) Marginal Cost(MC)…

a. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. b. What is the optimal level of sewage for this city? How can you tell?

a. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. b. What is the optimal level of sewage for this city? How can you tell?

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

43. A city currently emits 16 million gallons (MG) of
raw sewage into a lake that is beside the city. Table
12.13 shows the total costs (TC) in thousands of dollars
of cleaning up the sewage to different levels, together
with the total benefits (TB) of doing so. Benefits include
environmental, recreational, health, and industrial
benefits.
TC
TB
16 MG
Current
Current
12 MG
50
800
8 MG
150
1300
4 MG
500
1850
O MG
1200
2000
Table 12.13
a. Using the information in Table 12.13 calculate
the marginal costs and marginal benefits of
reducing sewage emissions for this city.
b. What is the optimal level of sewage for this city?
How can you tell?

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