Suppose the Current Stock of Greenhouse Gases in the Atmosphere

question 64

Multiple Choice

Suppose the current stock of greenhouse gases in the atmosphere is 100 million tons, the stock dissipation rate is 0.02, and we will emit 4 million tons into the atmosphere this year. What is the stock level of greenhouse gases expected to be for next year?

• A) 98 million tons
• B) 100 million tons
• C) 102 million tons
• D) 104 million tons

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Definitions:

Utility Function

It's a mathematical representation of how a consumer's preferences over a set of goods and services translates into a level of satisfaction or utility.

Price of X

The cost at which a specific item or commodity, denoted as "X," is sold in the market.

Marginal Rate of Substitution

The exchange rate between goods that allows a consumer to trade off one product for another without altering their overall happiness.

Convex Preferences

A characteristic of consumer preference whereby a consumer prefers combinations or mixtures of goods over extreme amounts of single goods, displaying a preference for diversification.