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For each of the two statements below, explain whether it is true or false. Use diagrams as appropriate and include a defini:on for the word/phrase that is underlined. Each part is worth 5 marks. a) In the situation where pollution is unproductive, the value of pollu:on can be determined through observation of changes in land prices alone. b) Defensive expenditures overstate the true marginal willingness-to-pay for better environmental quality..

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For each of the two statements below, explain whether it is true or false. Use diagrams as appropriate and include a defini:on for the word/phrase that is underlined. Each part is worth 5 marks. a) In the situation where pollution is unproductive, the value of pollu:on can be determined through observation of changes in land prices alone. b) Defensive expenditures overstate the true marginal willingness-to-pay for better environmental quality.

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