Suppose that if all countries acted collectively to reduce carbon emissions, the total benefits to all countries would exceed the costs. However, suppose that each country has a dominant strategy of not abating and that by pursuing their dominant strategy, all countries would end up worse off than if all countries chose to abate. In this scenario, which of the following would explain why each country has a dominant strategy of not abating? Each country finds that the cost of reducing its own carbon emissions is greater than the benefit it would receive from all countries' abatement. Each country finds that the cost of reducing its own carbon emissions is greater than the benefit it would receive from its own abatement. Each country's abatement would provide benefits only to itself and not to other countries. Each country chooses not to abate because it knows all other countries will not abate.

Suppose that if all countries acted collectively to reduce carbon emissions, the total benefits to all countries would exceed the costs. However, suppose that each country has a dominant strategy of not abating and that by pursuing their dominant strategy, all countries would end up worse off than if all countries chose to abate. In this scenario, which of the following would explain why each country has a dominant strategy of not abating? Each country finds that the cost of reducing its own carbon emissions is greater than the benefit it would receive from all countries' abatement. Each country finds that the cost of reducing its own carbon emissions is greater than the benefit it would receive from its own abatement. Each country's abatement would provide benefits only to itself and not to other countries. Each country chooses not to abate because it knows all other countries will not abate.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 1P

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