Question 1

An unexpected discovery of a new mineral deposit will cause the

Accepted Answer

A)  demand curve to shift outward. 
B)  demand curve to shift inward. 
C)  supply curve to shift outward. 
D)  supply curve to shift inward. 
A)  demand curve to shift outward. 
B)  demand curve to shift inward. 
C)  supply curve to shift outward. 
D)  supply curve to shift inward.

Question 2

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 3

How does the price system cope with depletable resources?

Accepted Answer

The rule is that under perfect competiti

Question 4

Direct controls are generally much more costly than emissions taxes because

Accepted Answer

A)  under direct controls emissions cutbacks are usually not apportioned among the firms on the basis of their ability to reduce pollution cheaply and efficiently. 
B)  emissions tax per unit of output is higher than the per-unit direct control program cost. 
C)  government cannot legally levy emissions taxes that are as high. 
D)  firms disregard emissions taxes. 
A)  under direct controls emissions cutbacks are usually not apportioned among the firms on the basis of their ability to reduce pollution cheaply and efficiently. 
B)  emissions tax per unit of output is higher than the per-unit direct control program cost. 
C)  government cannot legally levy emissions taxes that are as high. 
D)  firms disregard emissions taxes.

Question 5

If not recycled, an input used in production ultimately winds up as a waste product.

Accepted Answer

A) True 
 B)False

Question 6

Individuals and government have been contributors in harming the environment.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Part of the pollution problem is due to

Accepted Answer

A)  the absence of markets for goods like clean air and clean water. 
B)  the lack of well-defined property rights to clean air and clean water. 
C)  the unreliability of voluntary programs to cut pollution. 
D)  All of the above are correct. 
A)  the absence of markets for goods like clean air and clean water. 
B)  the lack of well-defined property rights to clean air and clean water. 
C)  the unreliability of voluntary programs to cut pollution. 
D)  All of the above are correct.

Question 9

The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth and which protects humans from ultraviolet radiation.Output of this substance has been restricted by a licensing system where producers have to bid in the open market for licenses to produce them in specified quantities.This is an example of dealing with externalities by

Accepted Answer

A)  voluntary compliance. 
B)  direct controls. 
C)  taxes. 
D)  the market mechanism. 
A)  voluntary compliance. 
B)  direct controls. 
C)  taxes. 
D)  the market mechanism.

Question 10

Recycling rates for aluminum, paper, and glass have been increasing in the United States.

Accepted Answer

A) True 
 B)False

Question 11

If the price of garbage removal rises, people will

Accepted Answer

A)  demand a lesser quantity of garbage removal. 
B)  take more waste to recycling centers. 
C)  repair broken items rather than throwing them out. 
D)  All of the above are correct. 
A)  demand a lesser quantity of garbage removal. 
B)  take more waste to recycling centers. 
C)  repair broken items rather than throwing them out. 
D)  All of the above are correct.

Question 12

Economists believe that the goal of environmental policy should be zero pollution.

Accepted Answer

A) True 
 B)False

Question 13

When pollution problems arise from a sudden crisis, pollution taxes are a useful form of control.

Accepted Answer

A) True 
 B)False

Question 14

Individuals play ____ in causing pollution.

Accepted Answer

A)  almost no role 
B)  a large but decreasing role 
C)  a major role 
D)  a reconstructive role 
A)  almost no role 
B)  a large but decreasing role 
C)  a major role 
D)  a reconstructive role

Question 15

Contrary to most thinking, governments play ____ in causing pollution.

Accepted Answer

A)  almost no role 
B)  a large but decreasing role 
C)  a major role 
D)  a reconstructive role 
A)  almost no role 
B)  a large but decreasing role 
C)  a major role 
D)  a reconstructive role

Question 16

Voluntary programs for reducing pollution

Accepted Answer

A)  have been more successful in the United States in encouraging recycling than any other type of program. 
B)  are most appropriate when surveillance and enforcement are impractical. 
C)  work most reliably when voluntary reduction of pollution over a long period is encouraged. 
D)  are enforced by legal authority. 
A)  have been more successful in the United States in encouraging recycling than any other type of program. 
B)  are most appropriate when surveillance and enforcement are impractical. 
C)  work most reliably when voluntary reduction of pollution over a long period is encouraged. 
D)  are enforced by legal authority.

Question 17

The production of smoke as a pollutant is a failure of the market system.

Accepted Answer

A) True 
 B)False

Question 18

The "greenhouse effect" is predicted to

Accepted Answer

A)  lead to the next ice age. 
B)  raise global temperature. 
C)  pollute the oceans. 
D)  break the edifice complex by the turn of the century. 
A)  lead to the next ice age. 
B)  raise global temperature. 
C)  pollute the oceans. 
D)  break the edifice complex by the turn of the century.

Question 19

Economists predicted that the price of a depletable natural resource would rise by about 15 percent.Actually the price fell 10 percent.What most likely happened?

Accepted Answer

A)  A government subsidy was removed. 
B)  Extraction costs increased. 
C)  Price controls were suspended. 
D)  An unexpected discovery of reserves was made. 
A)  A government subsidy was removed. 
B)  Extraction costs increased. 
C)  Price controls were suspended. 
D)  An unexpected discovery of reserves was made.

Question 20

Will depletable resources such as oil, coal, and aluminum be exhausted if their prices are left to the market?

Accepted Answer

No.As supplies decrease, price will rise

Exam 17: Externalities, the Environment, and Natural Resources

An unexpected discovery of a new mineral deposit will cause the

Economists consider environmental pollution to be a(n)

How does the price system cope with depletable resources?

Direct controls are generally much more costly than emissions taxes because

If not recycled, an input used in production ultimately winds up as a waste product.

Individuals and government have been contributors in harming the environment.

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

Part of the pollution problem is due to

Recycling rates for aluminum, paper, and glass have been increasing in the United States.

If the price of garbage removal rises, people will

Economists believe that the goal of environmental policy should be zero pollution.

When pollution problems arise from a sudden crisis, pollution taxes are a useful form of control.

Individuals play ____ in causing pollution.

Contrary to most thinking, governments play ____ in causing pollution.

Voluntary programs for reducing pollution

The production of smoke as a pollutant is a failure of the market system.

The "greenhouse effect" is predicted to

Economists predicted that the price of a depletable natural resource would rise by about 15 percent.Actually the price fell 10 percent.What most likely happened?

Will depletable resources such as oil, coal, and aluminum be exhausted if their prices are left to the market?

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 I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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