Question 1

Which of the following statements is incorrect about Eastern Europe and the countries of the former Soviet Union?

Accepted Answer

A) Grave environmental problems plague Eastern Europe. 
B) The area suffers from widespread illness and countless premature deaths. 
C) The Aral Sea, once the world's fourth-largest inland sea, is now half its previous size. 
D) Environmental policies set by the United States became the foundation of their new environmental rules. 
A) Grave environmental problems plague Eastern Europe. 
B) The area suffers from widespread illness and countless premature deaths. 
C) The Aral Sea, once the world's fourth-largest inland sea, is now half its previous size. 
D) Environmental policies set by the United States became the foundation of their new environmental rules.

Question 2

Direct controls have a clear advantage when a total ban is necessary.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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 5

The external costs of cigarettes are related to the health problem smoking produces for both smokers and nonsmokers.One estimate places these costs at 29 cents per pack.Presently, sales and excise taxes on cigarettes average about 37 cents per pack.These estimates suggest that (i) cigarette consumption is below the optimal or efficient quantity; (ii) cigarette taxes should be reduced.

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 6

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

Accepted Answer

A) opportunity to save on taxes by reducing emissions. 
B) opportunity to avoid taxes even without cutting emissions. 
C) opportunity to increase emission by paying more tax. 
D) opportunity to pay less by increasing emission. 
A) opportunity to save on taxes by reducing emissions. 
B) opportunity to avoid taxes even without cutting emissions. 
C) opportunity to increase emission by paying more tax. 
D) opportunity to pay less by increasing emission.

Question 7

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

Question 8

"One of the failings of a market system is the damage to the environment.Pollution would not exist with a centrally planned economy." Evaluate this statement.

Accepted Answer

Market systems fail to include external

Question 9

Externalities pose a market pricing system failure.

Accepted Answer

A) True 
 B)False

Question 10

In a free market, the quantity demanded will not exceed the quantity supplied of a resource, even if it is undergoing rapid depletion.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Environmental damage

Accepted Answer

A) can easily be reduced to zero. 
B) is inevitable where humans exist. 
C) tends to increase as long as costs outweigh the benefits to the damagers. 
D) is only a modern-day concern. 
A) can easily be reduced to zero. 
B) is inevitable where humans exist. 
C) tends to increase as long as costs outweigh the benefits to the damagers. 
D) is only a modern-day concern.

Question 13

Some of the newer pollutants that have appeared

Accepted Answer

A) are far more visible to the eye than older pollution. 
B) cause damage that is easily reversible. 
C) pose no significant long-term hazards. 
D) are far more dangerous than older forms of pollution. 
A) are far more visible to the eye than older pollution. 
B) cause damage that is easily reversible. 
C) pose no significant long-term hazards. 
D) are far more dangerous than older forms of pollution.

Question 14

An advantage emission taxes and permits have over direct controls is that the former

Accepted Answer

A) works well even if pollution output cannot be accurately measured. 
B) can respond quickly to new information about the dangers of particular pollutants. 
C) makes it in firms' interests to reduce pollution in the most efficient manner possible. 
D) reduces pollution to zero. 
A) works well even if pollution output cannot be accurately measured. 
B) can respond quickly to new information about the dangers of particular pollutants. 
C) makes it in firms' interests to reduce pollution in the most efficient manner possible. 
D) reduces pollution to zero.

Question 15

If the price of garbage removal rises, people will

Accepted Answer

A) demand a higher quantity of garbage removal. 
B) take less waste to recycling centers. 
C) repair broken items if the cost to do so is higher than throwing them away. 
D) take actions to avoid paying the higher price. 
A) demand a higher quantity of garbage removal. 
B) take less waste to recycling centers. 
C) repair broken items if the cost to do so is higher than throwing them away. 
D) take actions to avoid paying the higher price.

Question 16

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 17

Water quality in the United States has ____ in the past 25 years.

Accepted Answer

A) improved 
B) worsened 
C) remained unchanged 
D) improved slightly before a recent deterioration 
A) improved 
B) worsened 
C) remained unchanged 
D) improved slightly before a recent deterioration

Question 18

Why do most economists favor emissions taxes over direct controls as a pollution deterrent?

Accepted Answer

Direct controls require monitoring and e

Question 19

Detrimental externalities like pollution are a shortcoming of the market mechanism.Do they occur in free market economies alone? Explain with examples.

Accepted Answer

Even though the detrimental externalitie

Question 20

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?

Accepted Answer

A) 3P 
B) P3 
C) P(1 + r)3 
D) 3P(1 + r)3 
A) 3P 
B) P3 
C) P(1 + r)3 
D) 3P(1 + r)3

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

Which of the following statements is incorrect about Eastern Europe and the countries of the former Soviet Union?

Direct controls have a clear advantage when a total ban is necessary.

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

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

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

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

"One of the failings of a market system is the damage to the environment.Pollution would not exist with a centrally planned economy." Evaluate this statement.

Externalities pose a market pricing system failure.

In a free market, the quantity demanded will not exceed the quantity supplied of a resource, even if it is undergoing rapid depletion.

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

Environmental damage

Some of the newer pollutants that have appeared

An advantage emission taxes and permits have over direct controls is that the former

If the price of garbage removal rises, people will

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

Water quality in the United States has ____ in the past 25 years.

Why do most economists favor emissions taxes over direct controls as a pollution deterrent?

Detrimental externalities like pollution are a shortcoming of the market mechanism.Do they occur in free market economies alone? Explain with examples.

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?

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

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

Contemporary Issues in the Useconomy

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