benefit of 32, which is divided equally between the two countries.

a.

In Table 12.10, fill in the costs, benefits, and total payoffs to the countries of the following decisions.

Explain why, without some international agreement, they are likely to end up with neither country

acting to protect the environment.

Country B

Protect Not Protect

Country A

Protect

Not Protect

TABLE 12.10

13. A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to

clear some of Sherwood’s forest and grow corn, but obtaining this additional economic output will have an

environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of

economic output and environmental protection.

Combos Corn Bushels (thousands) Number of Trees (thousands)

P

Q

R

S

T

9

2

7

2

6

TABLE 12.11

5

30

20

40

10

a. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis,
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