ABSTRACT
In Chapter 3 an attempt was made to address the issue of environmental quality by looking at the trade-off society has to make between economic goods and improved environmental quality. In addition to recognizing the existence of this trade-off, an attempt was made to formally establish the necessary condition for attaining the level of output (economic goods) that would be consistent with the socially optimal level of environmental quality. This approach (as it deals with market prices and outputs directly) also allowed us to see the implications of environmental regulation at the macro level.
