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MARGINAL ANALYSIS. This example problem goes over the degree of comfort experienced at different levels of clean air. The different dollar value amounts are shown for every 10% increase in clean air. We want to find the optimum amount of clean air that we should have in this area, and it is important to remember that there is an optimal amount of pollution. Having 100% clean air is probably never going to be the solution. As we would expect, the more clean air we have in our economy, the higher the benefit we receive (we prefer clean air over dirty air). However, as we produce (or clean) more of the clean air we also incur a cost. As more clean air is present, the higher our costs. Note that benefits here is the same as utility, % of Clean Air Total Benefits Total Cost 0% 10% 50 45 20% 130 50 30% 205 58 40% 269 68 50% 319 81 60% 351 96 70% 371 115 80% 386 150 90% 398 200 280 100% Find the MC and MB. At what % of Clean Air do we have the best option to be adopted? 406 a) 20% b) 30% c) 60% d) 90%

MARGINAL ANALYSIS. This example problem goes over the degree of comfort experienced at different levels of clean air. The different dollar value amounts are shown for every 10% increase in clean air. We want to find the optimum amount of clean air that we should have in this area, and it is important to remember that there is an optimal amount of pollution. Having 100% clean air is probably never going to be the solution. As we would expect, the more clean air we have in our economy, the higher the benefit we receive (we prefer clean air over dirty air). However, as we produce (or clean) more of the clean air we also incur a cost. As more clean air is present, the higher our costs. Note that benefits here is the same as utility, % of Clean Air Total Benefits Total Cost 0% 10% 50 45 20% 130 50 30% 205 58 40% 269 68 50% 319 81 60% 351 96 70% 371 115 80% 386 150 90% 398 200 280 100% Find the MC and MB. At what % of Clean Air do we have the best option to be adopted? 406 a) 20% b) 30% c) 60% d) 90%

Solid Waste Engineering
Solid Waste Engineering
3rd Edition
ISBN:9781305635203
Author:Worrell, William A.
Publisher:Worrell, William A.
Chapter8: Landfills
Section: Chapter Questions
Problem 8.5P
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MARGINAL ANALYSIS. This example problem goes over the degree of comfort experienced at different levels of clean air. The different dollar value amounts are shown for every 10% increase in clean air. We want to find the optimum amount of clean air that we should have in this area, and it is important to remember that there is an optimal amount of pollution. Having 100% clean air is probably never going to be the solution. As we would expect, the more clean air we have in our economy, the higher the benefit we receive (we prefer clean air over dirty air). However, as we produce (or clean) more of the clean air we also incur a cost. As more clean air is present, the higher our costs. Note that benefits here is the same as utility, % of Clean Air| Total Benefits Total Cost 0% 50 45 10% 20% 130 50 30% 205 58 40% 269 68 50% 319 81 60% 351 96 70% 371 115 80% 386 150 90% 398 200 100% 406 280 Find the MC and MB. At what % of Clean Air do we have the best option to be adopted? a) 20% b) 30% c) 60% d) 90%
Transcribed Image Text:MARGINAL ANALYSIS. This example problem goes over the degree of comfort experienced at different levels of clean air. The different dollar value amounts are shown for every 10% increase in clean air. We want to find the optimum amount of clean air that we should have in this area, and it is important to remember that there is an optimal amount of pollution. Having 100% clean air is probably never going to be the solution. As we would expect, the more clean air we have in our economy, the higher the benefit we receive (we prefer clean air over dirty air). However, as we produce (or clean) more of the clean air we also incur a cost. As more clean air is present, the higher our costs. Note that benefits here is the same as utility, % of Clean Air| Total Benefits Total Cost 0% 50 45 10% 20% 130 50 30% 205 58 40% 269 68 50% 319 81 60% 351 96 70% 371 115 80% 386 150 90% 398 200 100% 406 280 Find the MC and MB. At what % of Clean Air do we have the best option to be adopted? a) 20% b) 30% c) 60% d) 90%
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