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Unformatted text preview: efficient in the U.S. than in China.
B) Reducing carbon dioxide emission by 100 units in China (zero units in the U.S.)
will cost the least in terms of the world's scare resources because, in the relevant
range, the marginal cost of abatement is always lower in China.
C) The cost-minimizing way to achieve the required reduction is for some of the
reduction to occur in the U.S. and for some of it to occur in China.
D) Efficiency requires that the 100 unit reduction be achieved by reducing emissions
by 100 units in China and zero units in the U.S because China now produces more
carbon dioxide emissions than does the U.S.
reducing emission there will have a lower cost
44. Ingrid, when she is in Sweden, and not skiing for CU, consumes only pickled herring
and Aquavit (a Swedish type of booze). She is indifferent to the amount of pickled
herring she eats, but the more the better for Aquavit. Consider her indifference curves
with Aquavit on the vertical axis and herring on the horizontal axis
A) Ingrid's indifference curves are vertical lines
B) Ingrid's indifference curves are downward sloping
utility so the
C) Ingrid's indifference curves are upward sloping
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- Fall '07