Question 1

Increasing scarcity of a resource causes new supplies to become more and more costly.

Accepted Answer

A) True 
 B)False

Question 2

What is new about environmental problems today is

Accepted Answer

A)  that for the first time in history we have environmental problems. 
B)  the increased rate at which air and water pollution is occurring in the United States. 
C)  the amount of attention the community now gives them. 
D)  that environmental problems with pollution and garbage disposal have almost completely disappeared. 
A)  that for the first time in history we have environmental problems. 
B)  the increased rate at which air and water pollution is occurring in the United States. 
C)  the amount of attention the community now gives them. 
D)  that environmental problems with pollution and garbage disposal have almost completely disappeared.

Question 3

The socialist countries of Eastern Europe have

Accepted Answer

A)  fewer environmental problems than capitalist countries. 
B)  improved their environment more than the capitalist countries. 
C)  worse environmental problems than capitalist countries. 
D)  worsened since the collapse of communism there. 
A)  fewer environmental problems than capitalist countries. 
B)  improved their environment more than the capitalist countries. 
C)  worse environmental problems than capitalist countries. 
D)  worsened since the collapse of communism there.

Question 4

Explain some important situations where direct controls have a clear advantage over taxes.

Accepted Answer

1.Where an emission is so dangerous that

Question 5

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 6

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 7

Which of the following could explain a fall over time in the price of the depletable resource aloe?

Accepted Answer

A)  The productivity of aloe mines fell. 
B)  New deposits of aloe were discovered. 
C)  Demand for aloe increased over time. 
D)  All of the above are correct. 
A)  The productivity of aloe mines fell. 
B)  New deposits of aloe were discovered. 
C)  Demand for aloe increased over time. 
D)  All of the above are correct.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Under an emissions tax program, the government sets ____; under an emissions permits program, the government sets ____.

Accepted Answer

A)  the price of the right to pollute; the price of the right to pollute 
B)  the price of the right to pollute; the permitted total quantity of pollution 
C)  the permitted total quantity of pollution; the price of the right to pollute 
D)  the permitted total quantity of pollution; the permitted total quantity of pollution 
A)  the price of the right to pollute; the price of the right to pollute 
B)  the price of the right to pollute; the permitted total quantity of pollution 
C)  the permitted total quantity of pollution; the price of the right to pollute 
D)  the permitted total quantity of pollution; the permitted total quantity of pollution

Question 10

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

Accepted Answer

A)  all firms reduce pollution equally and fairly. 
B)  firms that are able to clean up at lowest cost do so; others don't. 
C)  large polluters clean up the most, which is always lowest cost. 
D)  small polluters clean up the most, which is generally the cheapest. 
A)  all firms reduce pollution equally and fairly. 
B)  firms that are able to clean up at lowest cost do so; others don't. 
C)  large polluters clean up the most, which is always lowest cost. 
D)  small polluters clean up the most, which is generally the cheapest.

Question 11

Statistical studies suggest that the cost of direct controls for any target level of pollution is

Accepted Answer

A)  much higher than the cost of taxes on emissions. 
B)  about the same as the cost of taxes on emissions. 
C)  lower than the cost of taxes on emissions. 
D)  impossible to compare to the cost of taxes on emissions. 
A)  much higher than the cost of taxes on emissions. 
B)  about the same as the cost of taxes on emissions. 
C)  lower than the cost of taxes on emissions. 
D)  impossible to compare to the cost of taxes on emissions.

Question 12

Taxes on polluting emissions are

Accepted Answer

A)  more efficient than direct controls. 
B)  used by all economic societies. 
C)  less effective than direct regulations. 
D)  easily enforced through the criminal justice system. 
A)  more efficient than direct controls. 
B)  used by all economic societies. 
C)  less effective than direct regulations. 
D)  easily enforced through the criminal justice system.

Question 13

As a competitive economy uses its stocks of a depletable resource,

Accepted Answer

A)  the resource price will fall by ever greater amounts each year. 
B)  the resource price will rise by ever greater amounts each year. 
C)  the use of the resource will increase at an increasing rate. 
D)  resource use will drop to zero. 
A)  the resource price will fall by ever greater amounts each year. 
B)  the resource price will rise by ever greater amounts each year. 
C)  the use of the resource will increase at an increasing rate. 
D)  resource use will drop to zero.

Question 14

Even if demand for a resource grows over time, ever-rising prices of the resource that result from its growing scarcity still discourage consumption.

Accepted Answer

A) True 
 B)False

Question 15

What has happened to resource prices in the twentieth century and what do they reveal about resource scarcity?

Accepted Answer

Figure 17-3 from the textbook provides d

Question 16

What are the advantages of a tax system for pollution control?

Accepted Answer

There are two main advantages of a tax s

Question 17

How the price of a depletable resource changes over time depends on

Accepted Answer

A)  how the technology of resource extraction changes. 
B)  the interest rate. 
C)  how the technologies of production change in firms that use the resource. 
D)  All of the above are correct. 
A)  how the technology of resource extraction changes. 
B)  the interest rate. 
C)  how the technologies of production change in firms that use the resource. 
D)  All of the above are correct.

Question 18

Rising prices help control the process of resource depletion by

Accepted Answer

A)  discouraging consumption and waste. 
B)  stimulating more efficient use of the depletable resource. 
C)  encouraging resource-saving innovation. 
D)  doing all of the above. 
A)  discouraging consumption and waste. 
B)  stimulating more efficient use of the depletable resource. 
C)  encouraging resource-saving innovation. 
D)  doing all of the above.

Question 19

Voluntary programs, direct controls, and emissions taxes are all equally effective ways of controlling pollution.

Accepted Answer

A) True 
 B)False

Question 20

Price controls would ordinarily be used to increase rather than decrease prices of depletable resources.

Accepted Answer

A) True 
 B)False

Exam 17: Externalities, the Environment, and Natural Resources

Increasing scarcity of a resource causes new supplies to become more and more costly.

What is new about environmental problems today is

The socialist countries of Eastern Europe have

Explain some important situations where direct controls have a clear advantage over taxes.

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

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

Which of the following could explain a fall over time in the price of the depletable resource aloe?

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

Under an emissions tax program, the government sets ____; under an emissions permits program, the government sets ____.

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

Statistical studies suggest that the cost of direct controls for any target level of pollution is

Taxes on polluting emissions are

As a competitive economy uses its stocks of a depletable resource,

Even if demand for a resource grows over time, ever-rising prices of the resource that result from its growing scarcity still discourage consumption.

What has happened to resource prices in the twentieth century and what do they reveal about resource scarcity?

What are the advantages of a tax system for pollution control?

How the price of a depletable resource changes over time depends on

Rising prices help control the process of resource depletion by

Voluntary programs, direct controls, and emissions taxes are all equally effective ways of controlling pollution.

Price controls would ordinarily be used to increase rather than decrease prices of depletable resources.

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

Filters

Under an emissions tax program, the government sets ; under an emissions permits program, the government sets .