A reading by Holt et al. in the International Review of Economics Education, provided by The Economics Network, UK, that can be used for a classroom/laboratory activity to teach your students to identify and account for opportunity costs in production decisions.
Students will learn about opportunity costs and tradable emission permits as a part of the cap and trade scheme. They will also learn of challenges in decision-making through a role-playing activity in which the students get to set production quantities within the limits of their emissions permits.
Use this tool to help your students find answers to:
- Define the following:
- Opportunity Cost
- Production Cost
- Cap and Trade
- Pollution/Emissions Permit
- What are the advantages and disadvantages of using tradable emissions permits in the context of climate change?
About the tool
Tool Name | Teaching Opportunity Cost in an Emissions Permit Experiment |
Discipline | Economics |
Topic(s) in Discipline | Opportunity Costs, Consumer Choices, Fixed Market price, Tradable Pollution/ Emission Permits, Emission Permit Allocation, Cap and Trade Schemes, Carbon Emissions |
Climate Topic | Energy, Economics and Climate Change |
Type of tool | Reading (pp 34 – 42) |
Grade Level | Undergraduate |
Location | Global |
Language | English |
Translation | |
Developed by | Charles Holt, Erica Myers, Markus Wråke, Svante Mandell and Dallas Burtraw |
Hosted at | International Review of Economics Education, provided by The Economics Network, UK |
Link | Link |
Access | Online/Offline |
Computer Skills | Basic |