Question

Please chose the correct answer, and explain why. Thank you.

Question 9 1 pts What is the primary difference between economic analyses of climate change that advocate for a significant policy response versus those analyses that suggest a modest response? o Whether the analysis considers nonuse benefits O Whether the analysis considers nonmarket impacts The average increase in future temperatures The choice of the discount rate Question 10 1 pts Suppose that the government is using cost-benefit analysis to decide whether to impose a gas tax to reduce carbon emissions and mitigate climate change. A study that uses a low discount rate will probably... O None of these answers is correct. provide support for a small gas tax. provide support for a large gas subsidy. o provide support for a small gas subsidy. provide support for a large gas tax.

Answer 1

9.

B

The difference between these two analysis is the consideration or non-consideration of non-market impact such as impact upon quality of life, mortality rates, pollution and social issues among the others. Market oriented analysis, does not include the impact, faced by the society that is not directly linked to the market. So, it demands moderate or decent response. But, true economic analysis, considers its strongly and demands strong policy response.

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10.

B

A lower discount rate means bigger value of net present benefits and vice versa. So, a lower value of tax revenue, will also help recover the cost incurred if the discount rate is lower. So, when lower discount rate is used, then lower tax rate will also work to recover the Cost incurred.