The Opportunity Cost of Slowing Global Warming by Reducing Carbon

question 231

Multiple Choice

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is

• A) extremely high because policies that would significantly reduce emissions will adversely affect economic growth.
• B) insignificant compared to the probable impact of warming from those emissions.
• C) irrelevant because each aspect of the environment is important enough to justify full protection from environmental change, at whatever cost is necessary.
• D) zero because fuel cost savings alone will offset all opportunity costs.

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Definitions:

Short Run

A time period in economics where at least one factor of production is fixed, limiting the immediate response of a firm to changes in market conditions.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.

Average Variable Cost

The total variable cost divided by the quantity of output produced.

Output

The amount of goods or services produced by a company, sector, or economy.