As Part of Its Proposal to Win the 2012 Olympics,London

question 292

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

---

Definitions:

Developing Countries

Many countries of Africa, Asia, and Latin America that are characterized by lack of capital goods, use of nonadvanced technologies, low literacy rates, high unemployment, relatively rapid population growth, and labor forces heavily committed to agriculture.

High-Income

Relating to individuals, households, or countries with significantly higher earnings or GDP per capita compared to the average.

World Bank

A worldwide financial entity providing lending and grants to underdeveloped countries' governments for capital project development.

Real Output

The total value of all goods and services produced in an economy, adjusted for inflation, reflecting the actual productivity.