In the first years following the passage of the Clean Air Act in \(1970,\) air pollution declined sharply, and there were important health benefits, including a decline in infant mortality. According to an article in the Economist, however, recently some policymakers "worry that the EPA is constantly tightening restrictions on pollution, at ever higher cost to business but with diminishing returns in terms of public health." a. Why might additional reductions in air pollution come at "ever higher cost"? What does the article mean by arguing that these reductions will result in "diminishing returns in terms of public health"? b. How should the federal government decide whether further reductions in air pollution are needed?

When the exercise refers to 'higher costs' it means that as steps for further reduction of air pollution are taken, they are more difficult and more expensive to implement. For example, getting rid of the most noticeable pollutants might be comparatively easy, but eliminating the remaining pollution tends to be harder and more expensive. \When it mentions 'diminishing returns in terms of public health', it signifies that while initial reductions in pollution can have large impacts on public health, further reductions might have less noticeable benefits. The concept of 'diminishing returns' points to a situation where an increase in a particular input does not result in an equivalent increase in the output. Thus, additional reductions in pollution do not lead to equal benefits in public health as earlier reductions.

For part b of the exercise, it asks how the government should decide whether further reductions in air pollution are needed. In deciding whether to implement further reductions, government officials need to consider the costs and benefits of doing so. The costs would include the direct financial costs to businesses and any potential economic impacts, while the benefits would include improvements to public health, the environment, and potentially, economic gains from a healthier population. If the benefits outweigh the costs, then further reductions might be necessary.