Question 1

The observed change in the reserves of copper, lead, and zinc between 1960 and 1990 was most likely caused by

Accepted Answer

A) low prices discouraging exploration for new reserves. 
B) a slowdown in demand growth. 
C) high prices that stimulated exploration. 
D) the discovery of substitutes. 
A) low prices discouraging exploration for new reserves. 
B) a slowdown in demand growth. 
C) high prices that stimulated exploration. 
D) the discovery of substitutes.

Question 2

Increasing GDP generally causes increases in problems of waste disposal.

Accepted Answer

A) True 
 B)False

Question 3

Direct controls have a clear advantage where

Accepted Answer

A) an emission is so dangerous that it is prohibited altogether. 
B) a sudden change in circumstances calls for prompt and substantial change in conduct. 
C) effective and dependable metering devices have not been invented or are prohibitively costly to install and operate. 
D) All of the above create an advantage. 
A) an emission is so dangerous that it is prohibited altogether. 
B) a sudden change in circumstances calls for prompt and substantial change in conduct. 
C) effective and dependable metering devices have not been invented or are prohibitively costly to install and operate. 
D) All of the above create an advantage.

Question 4

Environmentalists, politicians, and economists have different perspectives on what constitutes appropriate environmental policy.Which of the following statements was probably made by an economist?

Accepted Answer

A) "We take the position that there are rights involved here, rights to be protected from threats to your health, regardless of the costs involved." 
B) "Protecting the environment is so important that standards cannot be too high, and continuing improvements must be made regardless of cost." 
C) "Pollution is a moral issue that cannot be reduced to dollars and cents." 
D) "Clean air and water are things we can buy-if the price is right." 
A) "We take the position that there are rights involved here, rights to be protected from threats to your health, regardless of the costs involved." 
B) "Protecting the environment is so important that standards cannot be too high, and continuing improvements must be made regardless of cost." 
C) "Pollution is a moral issue that cannot be reduced to dollars and cents." 
D) "Clean air and water are things we can buy-if the price is right."

Question 5

Price controls on resources generally lead to surpluses.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is most likely to reduce the consumption of an exhaustible natural resource?

Accepted Answer

A) a decrease in monopoly control of the market for the resource 
B) government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource 
C) implementation of a price ceiling for the resource below its equilibrium price 
D) government macroeconomic policies that lower the interest rate on bonds 
A) a decrease in monopoly control of the market for the resource 
B) government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource 
C) implementation of a price ceiling for the resource below its equilibrium price 
D) government macroeconomic policies that lower the interest rate on bonds

Question 7

In a free market for depletable natural resources, any shortage where there is an excess of quantity demanded over quantity supplied must be

Accepted Answer

A) expected as a matter of course. 
B) due to a price floor. 
C) the result of discovery of new deposits of the resources. 
D) artificial. 
A) expected as a matter of course. 
B) due to a price floor. 
C) the result of discovery of new deposits of the resources. 
D) artificial.

Question 8

In contrast to the need for legal enforcement under a system of direct controls, a taxes approach

Accepted Answer

A) is subject to greater uncertainty of payment of fees. 
B) makes taxes automatic and certain. 
C) speeds the prosecution and conviction process. 
D) does not actually reduce pollution, merely the cost of monitoring it. 
A) is subject to greater uncertainty of payment of fees. 
B) makes taxes automatic and certain. 
C) speeds the prosecution and conviction process. 
D) does not actually reduce pollution, merely the cost of monitoring it.

Question 9

In retaliation for U.S.support for Israel during the Arab-Israeli War, OPEC countries stopped selling oil to the United States.For the United States, this embargo caused the

Accepted Answer

A) demand curve for oil to shift out. 
B) demand curve for oil to shift in. 
C) supply curve of oil to shift out. 
D) supply curve of oil to shift in. 
A) demand curve for oil to shift out. 
B) demand curve for oil to shift in. 
C) supply curve of oil to shift out. 
D) supply curve of oil to shift in.

Question 10

Voluntarism in recycling garbage

Accepted Answer

A) generally has not been successful. 
B) works only where there is surveillance. 
C) increases the cost of recycling waste. 
D) has worked best of all recycling program alternatives. 
A) generally has not been successful. 
B) works only where there is surveillance. 
C) increases the cost of recycling waste. 
D) has worked best of all recycling program alternatives.

Question 11

Among the factors that might lead to a divergence from the path of prices for a depletable resource predicted by the economic models are: (i) unexpected discoveries of new reserves; (ii) new technologies which reduce extraction costs.

Accepted Answer

A) i and ii 
B) i but not ii 
C) ii but not i 
D) neither i nor ii 
A) i and ii 
B) i but not ii 
C) ii but not i 
D) neither i nor ii

Question 12

In North Carolina, a car must pass an emissions test before it can be registered.The emissions test costs $20 per car.This system is an example of

Accepted Answer

A) direct controls on pollution. 
B) a per-unit emissions tax. 
C) a "license to pollute." 
D) subsidies for nonpollution. 
A) direct controls on pollution. 
B) a per-unit emissions tax. 
C) a "license to pollute." 
D) subsidies for nonpollution.

Question 13

The price of a depletable natural resource last year rose more than expected.The most likely explanation is that

Accepted Answer

A) interest rates fell. 
B) an unexpected discovery of reserves was made. 
C) the major suppliers formed a cartel. 
D) price ceilings were established. 
A) interest rates fell. 
B) an unexpected discovery of reserves was made. 
C) the major suppliers formed a cartel. 
D) price ceilings were established.

Question 14

One advantage of emissions permits is that they allow the government to choose the level of pollution reduction.

Accepted Answer

A) True 
 B)False

Question 15

Economists consider environmental pollution to be a(n)

Accepted Answer

A) externality. 
B) pure public good. 
C) allocatively efficient outcome. 
D) public interest outcome. 
A) externality. 
B) pure public good. 
C) allocatively efficient outcome. 
D) public interest outcome.

Question 16

Which of the following could be called a virtue of raising prices of depletable resources?

Accepted Answer

A) It would discourage consumption and waste. 
B) It would stimulate more efficient use of resources. 
C) It would encourage innovation and discovery of alternatives. 
D) All of the above are true. 
A) It would discourage consumption and waste. 
B) It would stimulate more efficient use of resources. 
C) It would encourage innovation and discovery of alternatives. 
D) All of the above are true.

Question 17

Economic theory predicts that the price of a depletable resource will rise as it becomes more scarce.

Accepted Answer

A) True 
 B)False

Question 18

If suppliers of garbage collection services charged the full costs of providing the service, the supply curve would

Accepted Answer

A) change to a positive slope. 
B) change to a negative slope. 
C) shift to the left. 
D) shift to the right. 
A) change to a positive slope. 
B) change to a negative slope. 
C) shift to the left. 
D) shift to the right.

Question 19

Economists generally prefer to deal with emissions of pollutants

Accepted Answer

A) with direct controls. 
B) by encouraging people not to pollute. 
C) by subsidizing the installation of pollution-control equipment. 
D) by taxing emissions. 
A) with direct controls. 
B) by encouraging people not to pollute. 
C) by subsidizing the installation of pollution-control equipment. 
D) by taxing emissions.

Question 20

When a resource is being depleted and becomes scarce, the market's way of encouraging conservation is for the price of the resource to rise, without any government intervention.

Accepted Answer

A) True 
 B)False

Exam 16: Externalities the Environment and Natural Resources

The observed change in the reserves of copper, lead, and zinc between 1960 and 1990 was most likely caused by

Increasing GDP generally causes increases in problems of waste disposal.

Direct controls have a clear advantage where

Environmentalists, politicians, and economists have different perspectives on what constitutes appropriate environmental policy.Which of the following statements was probably made by an economist?

Price controls on resources generally lead to surpluses.

Which of the following is most likely to reduce the consumption of an exhaustible natural resource?

In a free market for depletable natural resources, any shortage where there is an excess of quantity demanded over quantity supplied must be

In contrast to the need for legal enforcement under a system of direct controls, a taxes approach

In retaliation for U.S.support for Israel during the Arab-Israeli War, OPEC countries stopped selling oil to the United States.For the United States, this embargo caused the

Voluntarism in recycling garbage

Among the factors that might lead to a divergence from the path of prices for a depletable resource predicted by the economic models are: (i) unexpected discoveries of new reserves; (ii) new technologies which reduce extraction costs.

In North Carolina, a car must pass an emissions test before it can be registered.The emissions test costs $20 per car.This system is an example of

The price of a depletable natural resource last year rose more than expected.The most likely explanation is that

One advantage of emissions permits is that they allow the government to choose the level of pollution reduction.

Economists consider environmental pollution to be a(n)

Which of the following could be called a virtue of raising prices of depletable resources?

Economic theory predicts that the price of a depletable resource will rise as it becomes more scarce.

If suppliers of garbage collection services charged the full costs of providing the service, the supply curve would

Economists generally prefer to deal with emissions of pollutants

When a resource is being depleted and becomes scarce, the market's way of encouraging conservation is for the price of the resource to rise, without any government intervention.

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand an Initial Look

Consumer Choice Individual and Market Demand

Demand and Elasticity

Production Inputs and Cost Building Blocks for Supply Analysis

Output Price and Profit the Importance of Marginal Analysis

Securities Business Finance and the Economy the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power Regulation and Antitrust

The Case for Free Markets the Price System

The Shortcomings of Free Markets

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship the Human Inputs

Poverty Inequality and Discrimination

Is Us Economic Leadership Threatened

International Trade and Comparative Advantage

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