"The United States Should Not Sign the Kyoto Protocol, an International

question 374

Multiple Choice

"The United States should not sign the Kyoto Protocol, an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels." An economist should be expected to

• A) disagree with this statement. The science on global warming is clearly known, and the Kyoto Protocol is the best, lowest cost, method to minimize the effects of global warming.
• B) disagree with this statement. Even though much critical information is still missing, the Kyoto Protocol will certainly reduce carbon emissions enough to greatly reduce atmospheric warming.
• C) agree with this statement. The benefits of a warming climate will unquestionably be greater than the costs.
• D) probably agree with this statement. The costs of the Kyoto Protocol are great, and the expected impact from it on world temperatures over the next century is extremely small.

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Definitions:

Fewer Resources

A situation or condition where there is a reduced availability of inputs or factors of production such as land, labor, and capital.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors.

Opportunity Cost

The expense incurred by not choosing the second-best option when making a decision or selection.

Comparative Advantage

The capacity of an entity to generate a product or service with a smaller opportunity cost than others.