The surprising observation that houses in cold climates have higher inside temperatures is consistent with the competitive model because:
A)people will act to equalize the marginal costs of heating across climates.
B)houses in warm climates have higher marginal costs of heating.
C)houses in warm climates have more insulation.
D)people in warm climates care less about temperature.

Question

Quizplus · Accepted Answer

The competitive model predicts that households will undertake actions that equalize marginal costs across regions. In this case, houses in cold climates have lower marginal costs of heating due to the colder climate, leading to higher inside temperatures. Houses in warm climates would have higher marginal costs of heating and therefore, lower inside temperatures.

The Surprising Observation That Houses in Cold Climates Have Higher