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

Question

Quizplus · Accepted Answer

The decision to drop the carbon offset plan suggests that the organizers determined the marginal cost of reducing emissions was greater than the marginal benefits, making it an economically rational decision.

As Part of Its Proposal to Win the 2012 Olympics