Exhibit 30-4 ​

question 171

Multiple Choice

Exhibit 30-4
​

-Refer to Exhibit 30-4. If a negative externality exists, then the market ____________output by the amount ________________.

• A)overproduces; Q₁
• B)underproduces; Q₂
• C)overproduces; Q₁ - Q₂
• D)underproduces; Q₂ - Q₁

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Definitions:

Montreal Protocol

An international treaty designed to protect the ozone layer by phasing out the production of numerous substances that are responsible for ozone depletion.

Paris Climate Change Conference

An international meeting (COP21) held in 2015, where the Paris Agreement on climate change was negotiated, aiming to reduce global greenhouse gas emissions and limit global warming.

Global Climate Agreement

An international accord aimed at addressing and mitigating the impacts of climate change through collective action.

Global Warming

The long-term rise in Earth's average surface temperature, primarily due to human activities that emit greenhouse gases into the atmosphere.