Exam 16: The Economics of the Environment, and Natural Resources

The U.S.Environmental Protection Agency estimated that communities that use the "pay-as-you-throw" program generate almost 50 percent less waste than communities where fixed fees or taxes cover the cost of curbside trash pickup.

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

As a resource becomes more scarce, we expect its price to

Define the following terms and explain their importance to the study of economics. a.Greenhouse gases b.Externality c.Emissions permits d.Known reserves

Explain what a "cap and trade" program is and how it works.Does the United States have a cap and trade program? If so, is it successful?

Direct controls may be a more expensive method in reducing pollution than emissions taxes.

If one tracks the prices of critical metals, like lead, zing, and copper, one sees that

Rising prices of resources leads to inefficient resource use by industry.

Voluntarism in recycling garbage

Which of the following could be called a virtue of raising prices of depletable resources? (i) It would discourage consumption and waste.(ii) It would stimulate more efficient use of resources.(iii) It would encourage innovation and discovery of alternatives.

If timber prices are rising slower than the rate of interest then

Prohibiting the use of "dirty" fuels by industry is an example of

Basic supply and demand analysis can be used to explain how externalities lead to environmental problems.

Most prophecies of the imminent exhaustion of many natural resources have not come true because

Pollution is an example of a negative externality.

Taxes on polluting firms have

Which of the following environmental approaches is most appropriate when surveillance and enforcement is impractical?

If a depletable resource is selling in a perfectly competitive market, its expected price will continue to fall over time.This makes it unprofitable for firms to seek out the resource and bring it to market.

Environmental quality is

A failure of the pricing system has led to pollution.