Question 1

Cap-and-trade programs limit pollution by selling firms a fixed amount of permits to pollute.

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A) such resources are generally available in infinite quantities. 
B) rising prices for resources have stimulated supply and encouraged innovation. 
C) the demand for most natural resources has fallen as income levels have increased. 
D) government price floors have prevented resource exhaustion. 
A) such resources are generally available in infinite quantities. 
B) rising prices for resources have stimulated supply and encouraged innovation. 
C) the demand for most natural resources has fallen as income levels have increased. 
D) government price floors have prevented resource exhaustion. B

Question 3

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. This will reduce quantity demanded, in line with the remaining, but more difficult to extract, supplies. For example, oil was depleted in the continental United States before turning to Alaska. Similarly, Britain only developed North Sea oil as the price rose.

Question 4

Taxes on polluting firms have

Accepted Answer

A) can easily be avoided and are therefore, unsuccessful. 
B) been successful in reducing water pollution in the Ruhr River basin in Germany. 
C) more advantageous over voluntarism and direct controls. 
D) not been used in the United States. 
A) can easily be avoided and are therefore, unsuccessful. 
B) been successful in reducing water pollution in the Ruhr River basin in Germany. 
C) more advantageous over voluntarism and direct controls. 
D) not been used in the United States.

Question 5

Which of the following statements about waste disposal is not true?

Accepted Answer

A) Raw material that has been used must be recycled or disposed. 
B) The physical law of conservation of matter dictates that objects like petroleum can be transformed, but cannot simply vanish. 
C) The simplest way of dealing with waste is through incineration. 
D) The amount of recycling in the United States and European Union has risen over time. 
A) Raw material that has been used must be recycled or disposed. 
B) The physical law of conservation of matter dictates that objects like petroleum can be transformed, but cannot simply vanish. 
C) The simplest way of dealing with waste is through incineration. 
D) The amount of recycling in the United States and European Union has risen over time.

Question 6

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 7

Briefly and concisely define the following terms. 
A.Voluntarism 
b.Direct controls 
c. Depletable resource

Accepted Answer

a.Voluntarism refers to a number of nonm

Question 8

The Army Corps of Engineers has been accused of acting on the basis of a so-called "edifice complex."

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) voluntarism. 
B) direct controls. 
C) taxes on emissions. 
D) the permit to pollute. 
A) voluntarism. 
B) direct controls. 
C) taxes on emissions. 
D) the permit to pollute.

Question 10

Why is it misleading to argue that emissions permits are a "license to pollute"?

Accepted Answer

Critics of emissions trading fail to und

Question 11

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

Accepted Answer

There are two main advantages of a tax s

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which fact about recycling is incorrect?

Accepted Answer

A) Between 1980 and 2008, recycling in the United States has tripled. 
B) As of 2014, the 27 European Union members recycled more in terms of a percentage of garbage than the United States. 
C) Recycling rates of commonly used materials in the United States and industrial countries have fallen. 
D) Only 9 percent of plastics are recycled. 
A) Between 1980 and 2008, recycling in the United States has tripled. 
B) As of 2014, the 27 European Union members recycled more in terms of a percentage of garbage than the United States. 
C) Recycling rates of commonly used materials in the United States and industrial countries have fallen. 
D) Only 9 percent of plastics are recycled.

Question 14

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 15

Why do polluting firms overproduce? Use a completely and correctly labeled graph to illustrate your answer.

Accepted Answer

An appropriate diagram should resemble F

Question 16

What are the implications of the law of conservation of matter and energy for recycling and waste disposal?

Accepted Answer

The physical law of conservation of matt

Question 17

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

Accepted Answer

Direct controls require monitoring and e

Question 18

Explain why environmental damage would be classified as an externality.

Accepted Answer

An externality is an incidental conseque

Question 19

The advantages of emissions permits over taxes is\are that

Accepted Answer

A) it increases uncertainty about the quantity of pollution that will be emitted. 
B) environmental authorities decide on an emissions ceiling in advance of issuing permits. 
C) pollutants can be raised to levels that have adverse effects on health. 
D) firms whose marginal cost of reducing emissions are lower than the market price of permits will find it more profitable to buy additional permits than to reduce their emissions. 
A) it increases uncertainty about the quantity of pollution that will be emitted. 
B) environmental authorities decide on an emissions ceiling in advance of issuing permits. 
C) pollutants can be raised to levels that have adverse effects on health. 
D) firms whose marginal cost of reducing emissions are lower than the market price of permits will find it more profitable to buy additional permits than to reduce their emissions.

Question 20

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.

Exam 16: Externalities, Externaliteis, the Environment, and Natural Resources

Cap-and-trade programs limit pollution by selling firms a fixed amount of permits to pollute.

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

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

Taxes on polluting firms have

Which of the following statements about waste disposal is not true?

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

Briefly and concisely define the following terms. A.Voluntarism b.Direct controls c. Depletable resource

The Army Corps of Engineers has been accused of acting on the basis of a so-called "edifice complex."

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

Why is it misleading to argue that emissions permits are a "license to pollute"?

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

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

Which fact about recycling is incorrect?

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

Why do polluting firms overproduce? Use a completely and correctly labeled graph to illustrate your answer.

What are the implications of the law of conservation of matter and energy for recycling and waste disposal?

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

Explain why environmental damage would be classified as an externality.

The advantages of emissions permits over taxes is\are that

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

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

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

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

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