Chapter 12: Problem 24

As the extent of environmental protection expands, would you expect the marginal benefits of environmental protection to rise or fall? Why or why not?

Short Answer

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As the extent of environmental protection expands, the marginal benefits of environmental protection are likely to fall due to diminishing returns. This is because as more resources and effort are devoted to environmental protection, the fewer cost-effective opportunities remain, leading to smaller benefits gained from each additional investment. Balancing the costs and benefits is essential, as it is important to consider the point where marginal costs of additional measures outweigh the marginal benefits.

Step by step solution

Understanding the concepts:

Before we dive into the problem, let's understand the main concepts involved: 1. Environmental protection refers to the practices and actions taken to protect the environment, reduce pollution, conserve resources, and preserve ecosystems. 2. Marginal benefits are the additional benefits gained from undertaking an action, such as protecting the environment, compared to the benefits obtained up until that point. In this case, the marginal benefits are the gains we obtain from increasing the extent of environmental protection. With these concepts in mind, let's explore how the marginal benefits of environmental protection change when the extent of environmental protection expands.

Examining the Marginal Benefits:

As we increase the extent of environmental protection, we can generally expect that the environment will become cleaner, healthier, and more sustainable. Initially, when little effort is being put into environmental protection, the marginal benefits can be very high as quick gains can be made for relatively low costs (e.g. shutting down a heavily polluting factory). However, as environmental protection efforts continue, some diminishing returns might occur. This means that the more we invest in environmental protection, the lower the marginal benefits are likely to be because we have already taken advantage of the most cost-effective opportunities.

Impact of Diminishing Returns:

Since diminishing returns play a significant role in the relationship between the extent of environmental protection and its marginal benefits, we would expect the marginal benefits to fall as the extent of environmental protection expands. This is because as we implement more and more environmental protection measures, the additional benefits we gain from each measure become smaller. While some level of environmental protection is essential for the well-being of society and the planet, it is important to recognize the point at which the costs of additional measures outweigh the benefits. In conclusion:

Expectation of Marginal Benefits:

As the extent of environmental protection expands, the marginal benefits of environmental protection are likely to fall. This is because the more resources and effort that are devoted to environmental protection, the fewer cost-effective opportunities remain, leading to diminishing returns for each additional investment. It is essential to balance the costs and benefits of environmental protection, considering to the point where the marginal costs of additional measures outweigh the marginal benefits.

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