Damages from air pollution include adverse effects on human health and ecosystems, and reduced visibility. The first few units of pollution cause relatively little damage because ecosystems can process and break down a certain amount of pollution, and the levels are generally too low to have significant health impacts. Eventually, levels become high enough to start causing damage such as asthma, noticeable reductions in visibility, and ecological degradation. A small amount of automobile exhaust on a clear day may be a minor annoyance, but the same amount added to a smoggy area at rush hour could trigger significant breathing and health problems. Thus the marginal external damages of pollution, MEDP, start off ___________________.

a. small and grow as the level of pollution rises.
b. large and shrink as the level of pollution rises.
c. large and shrink as the level of pollution falls.
d. small and grow as the level of pollution falls.
e. None of the above.

Answer: a. small and grow as the level of pollution rises.

Economics

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