Exam 16: Externalities the Environment and Natural Resources

At the interest rate r, the price of a depletable natural resource three years from the present (price in present = P) will be, everything else being equal, which of the following?

Centrally planned economies like China produce relatively little pollution.

Direct controls on polluting activity

The reason why cleanup costs are lower for a taxes approach than for a direct controls approach is that

Taxes on polluting firms for pollution are intended to

Direct controls often require long legal proceedings before they can be effective.

The "greenhouse effect" is predicted to

Voluntarism as an approach to environmental problems

Wastes impose costs upon the community if they are

If one adopts a pure free market approach to depletable resources, then one can expect the price of resources to

What are the implications of the law of conservation of matter and energy for recycling and waste disposal?

One of the virtues of rising resource prices is they encourage innovation, especially the discovery of other more abundant resources.

A tax on polluting emissions will

In the last three decades, air quality in American cities has improved.

If the price of garbage removal rises, people will

Although pollution is caused by a failure of the market, many economists believe that the best way to protect the environment is to utilize the price mechanism.

Taking advantage of the built-in-loophole in emission taxes implies

Part of the pollution problem is due to

One of the reasons that pollution problems are as large as they are is that

____ completely deplete the most vital resources.