The optimal amount of pollution abatement is such that
A) the total benefit of reducing pollution is equal to the total cost of reducing pollution.
B) the marginal private cost of reducing pollution is just equal to the profit of the polluting firms.
C) there is no remaining pollution.
D) the marginal social cost of reducing pollution is just equal to the marginal social benefits from doing so.
E) none of the above; there is no optimal amount of pollution abatement.
Ans: D) the marginal social cost of reducing pollution is just equal to the marginal social benefits from doing so.
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The real interest rate is equal to the nominal interest rate minus:
A. accounting profit. B. economic profit. C. taxes. D. the inflation rate.