The table below shows the outcomes (in millions of USD) of two alternative carbon emission strategies for China and the U.S.: Restrict (taking measures to reduce emissions, for example by regulating or taxing the use of fossil fuels) and BAU (continuing with ‘business as usual’). Read the following statements and select the correct one.
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Question

The table below shows the outcomes (in millions of USD) of two alternative carbon emission strategies for China and the U.S.: Restrict (taking measures to reduce emissions, for example by regulating or taxing the use of fossil fuels) and BAU (continuing with ‘business as usual’). Read the following statements and select the correct one.

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Answer

If there is a reduction of more than 25 million dollars in the cost for the country to take measures to reduce emissions due to technological advancements, the US and China will reach the outcome that is best for both.

Answer

If the benefit from reducing emissions increases by more than 20 million dollars for both countries as long as at least one country chooses to restrict, (restrict, restrict) is a Nash equilibrium.

Answer

The Nash equilibrium results in the highest possible payoffs for both players.

Answer

If China chooses BAU, US will also choose BAU.

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The table below shows the outcomes (in millions of USD) of two alternative carbo...

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