Some claim that fervent recycling is the result of a "religion" of conservation that makes people feel good despite a lack of concrete reason. Suppose that the curves in Figure 8.5 exclude the value of such good feelings. Suppose further that when the value of good feelings is added to the private marginal benefit curve in Figure 8.5, the combined MB curve (monetary benefit plus good feelings benefit) is above the MB _social curve that excludes the value of these feelings. Re-create Figure 8.5 and add the combined MB curve as described. Would the quantity of recycling at the intersection of the combined MB curve and the MC curve be excessive from the standpoint of social efficiency?

Figure 8.5

Transcribed Image Text:

S per Unit MC private = Supply MB social = MB private + MEB MEB MB private = Demand Qp Units Recycled