Question

The Environmental Protection Agency is attempting to rule on whether pollution from greenhouse gas emissions endangers public safety One of the many greenhouse gas polluters is cows and their cow farts (this is really true). Economists have devised a theory to help address this issue. Identify the statement that economic theory believes to be true from the list below.

a. To maximize social welfare, all pollution should be removed.
b. If the cost of paying a pollution charge (fart tax) is less than the cost of reducing pollution, the farmer (and his or her cows) will have an incentive to reduce pollution.
c. The benefit of pollution cleanup to society is always less than the cost of pollution O cleanup, especially if all costs are borne by the producer (which means the farmer, but technically, the cows are doing the producing)
d. Environmental standards (aka command-and-control regulation) regarding cow farts creates strong incentives for the farmer to reduce as much as possible
e. The efficient level of pollution removal occurs where the marginal benefit of pollution O removal equals the marginal cost of pollution removal (some cow farts could be allowed)

Answer 1

a. To maximize social welfare, all pollution should be removed.

Step-by-step explanation:

The correct answer is last option I.e.

The efficient level of pollution removal occurs where the marginal benefit of pollution removal equals the marginal cost of pollution removal (some cow farts could be allowed).

Since benefit of pollution removal equals the cost of pollution removal therefore pollution is removed efficiently.