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|
|Topic(s) in Discipline||Opportunity Costs, Consumer Choices, Fixed Market price, Tradable Pollution/ Emission Permits, Emission Permit Allocation, Cap and Trade Schemes|
|Climate Topic||Energy, Economics and Climate Change|
|Type of tool||Reading (pp 34 – 42)|
|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|