international borders are forbiddingly complex. However, it seems highly unlikely that some form of world

government will impose a detailed system of environmental command-and-control regulation around the

world. As a result, a decentralized and market-oriented approach may be the only practical way to address

international issues such as global warming and biodiversity.

12.6 The Tradeoff between Economic Output and Environmental Protection

LEARNING OBJECTIVES

By the end of this section, you will be able to:

• Apply the production possibility frontier to evaluate the tradeoff between economic output and the

environment

•

Interpret a graphic representation of the tradeoff between economic output and environmental protection

We can analyze the tradeoff between economic output and the environment with a production possibility

frontier (PPF) such as the one in Figure 12.5. At one extreme, at a choice like P, a country would be selecting a
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