As Part of Its Proposal to Win the 2012 Olympics

question 169

Multiple Choice

As part of its proposal to win the 2012 Olympics, London developed a carbon offset plan to reduce the Games' impact on the environment. In 2011, the organizers decided to drop this plan to reduce emissions. We can conclude that

• A)there are no incentives to reduce carbon emissions.
• B)the organizers are not making a rational decision.
• C)the organizers are ignoring a sunk cost.
• D)it is difficult to calculate the cost of reducing emissions.
• E)the marginal cost of reducing emissions exceeded the marginal benefits of reducing emissions.

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Definitions:

Double-Entry Bookkeeping

A system of recording and classifying business transactions that maintains the balance of the accounting equation.

Annual Report

Summary of a firm’s financial information, products, and growth plans for owners and potential investors.