Question 1

Four companies, Alpha, Beta, Gamma and Delta, are burning coal to produce electricity. As a result, they also produce emissions. In the table below, the first row of shows the total pounds of emissions currently produced by each firm. The other rows of the table show the cost for each firm of reducing emissions by the first 50 tons, the second 50 tons, and so on.

The total cost of requiring each firm to reduce its garbage by one third is

Accepted Answer

A)   $167
B)   $137
C)   $187
D)   $127E) B) and C)
F) A) and D)

Question 2

Market failure describes a situation in which the market itself _______ in a way that balances social costs and benefits.

Accepted Answer

A)   remains outside the transaction
B)   incurs the costs outside the production process
C)   fails to allocate resources efficiently
D)   avoids externalitiesE) C) and D)
F) A) and D)

Question 3

Which of the following is used to describe the full spectrum of animal and plant genetic material?

Accepted Answer

A)   ecodiversity
B)   biodiversity
C)   envirodiversity
D)   duodiversityE) A) and D)
F) All of the above

Question 4

Those firms in the oil refining industry that can reduce pollution _______ will do so _______.

Accepted Answer

A)   for a flat charge; at the industrial level
B)   cheaply and easily; to minimize their pollution taxes
C)   for a flat charge; with the most expensive technologies
D)   cheaply and easily; with the most expensive technologiesE) A) and D)
F) All of the above

Question 5

A country is currently creating 40 million tons of toxic waste per year. The table below shows the marginal costs and benefits of reducing the amount of toxic waste to various amounts.

What number belongs in place of X?

Accepted Answer

A)   700
B)   900
C)   1300
D)   1500E) None of the above
F) B) and C)

Question 6

Marketable permits work best when there are _______ permit holders who are highly interested in trading.

Accepted Answer

A)   several dozen or a several hundred
B)   less than a hundred
C)   more than a thousand
D)   a few dozen or a few hundredE) B) and C)
F) A) and D)

Question 7

Property rights are the legal rights of ownership on which others are

Accepted Answer

A)   allowed to infringe by paying the property owner's pollution tax.
B)   able to enforce use of pollution-control technologies.
C)   able to specify allowable quantities of pollution.
D)   not allowed to infringe without paying compensation.E) B) and C)
F) A) and B)

Question 8

If a steel manufacturer considers the costs of labor and materials, as well as the broader costs of environmental injuries resulting from its manufacturing processes,

Accepted Answer

A)   its supply curve will be based on perceived benefits of maximizing utility.
B)   it is factoring in the social costs of the pollution it generates.
C)   its demand curve will be based on production choices relating to marginal costs.
D)   its costs will be the same as society's costs and all of the above.E) All of the above
F) A) and B)

Question 9

Which of the following will need to strike some balance between economic output and environmental quality as a prominent climate change priority?

Accepted Answer

A)   countries with high-incomes
B)   every country
C)   market-oriented countries
D)   command-oriented countriesE) All of the above
F) C) and D)

Question 10

Four companies, Alpha, Beta, Gamma and Delta, are burning coal to produce electricity. As a result, they also produce emissions. The first row of the table below shows the total pounds of emissions currently produced by each firm. The other rows of the table show the cost for each firm of reducing emissions by the first 50 tons, the second 50 tons, and so on. The government wants to reduce emissions by one third, and does so by issuing marketable permits based on the current level of emissions where the permits will shrink the allowable amount of pollution by one third.

Alpha will reduce emissions by _______ tons, Beta will reduce emissions by _______ tons, Gamma will reduce emissions by _______ tons, Delta will reduce emissions by _______ tons, for a total cost of _______.

Accepted Answer

A)   50, 150, 50, 250, $130
B)   50, 200, 0, 250, $150
C)   0, 200, 50, 250, $120
D)   50, 200, 50, 200, $100E) B) and C)
F) B) and D)

Question 11

In addition to the current levels of air and water pollution, a list of important environmental issues would most likely include:

Accepted Answer

A)   emissions of greenhouse gases
B)   safe disposal of hazardous waste materials
C)   destruction of wetlands and other habitats
D)   extinction of species and all of the aboveE) None of the above
F) B) and D)

Question 12

Command-and-control regulation is a body of law that

Accepted Answer

A)   fails to consider private costs of firms.
B)   specifies allowable quantities of pollution.
C)   details which pollution-control technologies must be used.
D)   can include both b and c.E) B) and D)
F) C) and D)

Question 13

Briefly explain how command-and-control regulation works.

Accepted Answer

Command-and-control regulation...

Question 14

Why do U.S. economists commonly refer to externalities as an example of market failure?

Accepted Answer

A)   firms that are required to pay social costs of externalities produce more
B)   externalities present a case where markets consider all social costs
C)   externalities present a case where markets only consider some social costs
D)   firms avoid having to pay social costs of externalities by lowering pricesE) B) and D)
F) All of the above

Question 15

Two logging companies are deciding whether or not to cut down a significant portion of a particular forest that both have access too. Both companies understand the environmental consequences of their actions, knowing that they are trading off higher profits for a better outcome from society's point of view. The payoffs facing these companies are given in the table below.

From the table, we know that if Company 2 chooses to cut, Company 1 will choose to _______ the forest. If Company 2 chooses to not cut, Company 1 will choose to _______ the forest.

Accepted Answer

A)   cut, do not cut
B)   cut, cut
C)   do not cut, do not cut
D)   do not cut, cutE) A) and B)
F) B) and C)

Question 16

An economist is more likely to identify _______ as a more efficient and flexible way for society to _______.

Accepted Answer

A)   marketable permits; allow a limited, declining amount of pollution to occur
B)   better defined property rights; to address issues of allowable levels of pollution
C)   market-oriented environmental tools; enforce strict limits on emissions
D)   better defined property rights; to shrink pollution levels over timeE) B) and C)
F) All of the above

Question 17

The problem of pollution arises in primarily _______economies around the world.

Accepted Answer

A)   command-oriented
B)   market-oriented
C)   middle income
D)   both a and bE) A) and C)
F) All of the above

Question 18

When a government establishes a marketable permit program to address environmental pollution, it is actually issuing a form of

Accepted Answer

A)   command-and-control regulation.
B)   pollution tax.
C)   permit to pollute.
D)   inflexible, costly regulation.E) A) and B)
F) All of the above

Question 19

The International Ecotourism Society estimates that international tourists interested in seeing nature or wildlife spend over

Accepted Answer

A)   $450 billion per year.
B)   $550 billion per year.
C)   $250 billion annually.
D)   $200 billion annually.E) C) and D)
F) B) and C)

Exam 12: Environmental Protection and Negative Externalities

Why do U.S. economists commonly refer to externalities as an example of market failure?

Correct Answer
verified

Marketable permits work best when there are _______ permit holders who are highly interested in trading.

Correct Answer
verified

An economist is more likely to identify _ as a more efficient and flexible way for society to _.

Correct Answer
verified

Which of the following will need to strike some balance between economic output and environmental quality as a prominent climate change priority?

Correct Answer
verified

Those firms in the oil refining industry that can reduce pollution _ will do so _.

Correct Answer
verified

Briefly explain how command-and-control regulation works.

Correct Answer
verified
Command-and-control regulation...
View Answer

The International Ecotourism Society estimates that international tourists interested in seeing nature or wildlife spend over

Correct Answer
verified

If a steel manufacturer considers the costs of labor and materials, as well as the broader costs of environmental injuries resulting from its manufacturing processes,

Correct Answer
verified

Which of the following is used to describe the full spectrum of animal and plant genetic material?

Correct Answer
verified

The problem of pollution arises in primarily _______economies around the world.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

When a government establishes a marketable permit program to address environmental pollution, it is actually issuing a form of

Correct Answer
verified

Property rights are the legal rights of ownership on which others are

Correct Answer
verified

A country is currently creating 40 million tons of toxic waste per year. The table below shows the marginal costs and benefits of reducing the amount of toxic waste to various amounts. What number belongs in place of X?

Correct Answer
verified

In addition to the current levels of air and water pollution, a list of important environmental issues would most likely include:

Correct Answer
verified

Correct Answer
verified

Market failure describes a situation in which the market itself _______ in a way that balances social costs and benefits.

Correct Answer
verified

Command-and-control regulation is a body of law that

Correct Answer
verified

Exam 12: Environmental Protection and Negative Externalities

Why do U.S. economists commonly refer to externalities as an example of market failure?

Correct AnswerverifiedShow Answer

Marketable permits work best when there are _______ permit holders who are highly interested in trading.

Correct AnswerverifiedShow Answer

An economist is more likely to identify _______ as a more efficient and flexible way for society to _______.

Correct AnswerverifiedShow Answer

Which of the following will need to strike some balance between economic output and environmental quality as a prominent climate change priority?

Correct AnswerverifiedShow Answer

Those firms in the oil refining industry that can reduce pollution _______ will do so _______.

Correct AnswerverifiedShow Answer

Briefly explain how command-and-control regulation works.

Correct AnswerverifiedCommand-and-control regulation...View AnswerShow Answer

The International Ecotourism Society estimates that international tourists interested in seeing nature or wildlife spend over

Correct AnswerverifiedShow Answer

If a steel manufacturer considers the costs of labor and materials, as well as the broader costs of environmental injuries resulting from its manufacturing processes,

Correct AnswerverifiedShow Answer

Which of the following is used to describe the full spectrum of animal and plant genetic material?

Correct AnswerverifiedShow Answer

The problem of pollution arises in primarily _______economies around the world.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a government establishes a marketable permit program to address environmental pollution, it is actually issuing a form of

Correct AnswerverifiedShow Answer

Property rights are the legal rights of ownership on which others are

Correct AnswerverifiedShow Answer

A country is currently creating 40 million tons of toxic waste per year. The table below shows the marginal costs and benefits of reducing the amount of toxic waste to various amounts. What number belongs in place of X?

Correct AnswerverifiedShow Answer

In addition to the current levels of air and water pollution, a list of important environmental issues would most likely include:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Market failure describes a situation in which the market itself _______ in a way that balances social costs and benefits.

Correct AnswerverifiedShow Answer

Command-and-control regulation is a body of law that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

An economist is more likely to identify _ as a more efficient and flexible way for society to _.

Correct Answer
verified

Correct Answer
verified

Those firms in the oil refining industry that can reduce pollution _ will do so _.

Correct Answer
verified

Correct Answer
verified
Command-and-control regulation...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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