Question 1

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 2

The price of a depletable natural resource last year rose more than expected. The most likely explanation is that

Accepted Answer

A) interest rates fell. 
B) an unexpected discovery of reserves was made. 
C) the major suppliers formed a cartel. 
D) price ceilings were established. 
A) interest rates fell. 
B) an unexpected discovery of reserves was made. 
C) the major suppliers formed a cartel. 
D) price ceilings were established.

Question 3

Which of the following statements is not true?

Accepted Answer

A) Ozone remains a pervasive problem in the United States. 
B) The United States suffers the worst air quality during winter months. 
C) Since the 1980s, there has been a downward trend in ambient concentrations of sulfur dioxide, carbon monoxide, and lead in the United States. 
D) Improperly dumped toxic substances can cause cancer and threaten overall health. 
A) Ozone remains a pervasive problem in the United States. 
B) The United States suffers the worst air quality during winter months. 
C) Since the 1980s, there has been a downward trend in ambient concentrations of sulfur dioxide, carbon monoxide, and lead in the United States. 
D) Improperly dumped toxic substances can cause cancer and threaten overall health.

Question 4

The price elasticity of demand for an exhaustible natural resource tends to

Accepted Answer

A) fall over time because extraction costs rise over time. 
B) stay constant over time because the resource's price rises at a constant rate. 
C) rise over time because the resource's rising price stimulates conservation and the development of substitutes. 
D) rise over time because resource extraction tends to become more efficient over time. 
A) fall over time because extraction costs rise over time. 
B) stay constant over time because the resource's price rises at a constant rate. 
C) rise over time because the resource's rising price stimulates conservation and the development of substitutes. 
D) rise over time because resource extraction tends to become more efficient over time.

Question 5

The government prefers a market-based approach to reduce firms' emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of

Accepted Answer

A) per-unit taxes on emissions of the gas. 
B) per-unit taxes on the goods produced by firms that emit the gas. 
C) subsidies to firms that agree not to emit the gas. 
D) sales of permits to emit specified quantities of the gas on specified days. 
A) per-unit taxes on emissions of the gas. 
B) per-unit taxes on the goods produced by firms that emit the gas. 
C) subsidies to firms that agree not to emit the gas. 
D) sales of permits to emit specified quantities of the gas on specified days.

Question 6

Emissions permits allow polluters to pay for the right to pollute a specified amount.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

a.Greenhouse gases are buildups of carbo

Question 8

Compare market price and quantity of steel to socially optimal price and quantity if steel producers ignore soot emitted from their smokestacks. Use a graph to assist your explanation

Accepted Answer

The market results in too low a price an

Question 9

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 10

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 11

Which of the following is an example of detrimental externality?

Accepted Answer

A) A trailer's entry onto an overcrowded road that delays the movement of other vehicles. 
B) Fall in demand for gasoline in the United States softens the price of gasoline in the global market. 
C) Government investment in energy generation from nonconventional sources. 
D) Society devotes huge quantity of its scarce resources for vital innovative activity. 
A) A trailer's entry onto an overcrowded road that delays the movement of other vehicles. 
B) Fall in demand for gasoline in the United States softens the price of gasoline in the global market. 
C) Government investment in energy generation from nonconventional sources. 
D) Society devotes huge quantity of its scarce resources for vital innovative activity.

Question 12

China, the last large communist society,

Accepted Answer

A) has proved that a command economy has far less pollution problems than capitalist economies. 
B) has urban smog levels higher than Los Angeles. 
C) has the world's most sophisticated pollution-control devices. 
D) has lowered its level of pollution dramatically since 1980. 
A) has proved that a command economy has far less pollution problems than capitalist economies. 
B) has urban smog levels higher than Los Angeles. 
C) has the world's most sophisticated pollution-control devices. 
D) has lowered its level of pollution dramatically since 1980.

Question 13

Which of the following is most likely to reduce the consumption of an exhaustible natural resource?

Accepted Answer

A) A decrease in monopoly control of the market for the resource 
B) Government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource 
C) Implementation of a price ceiling for the resource below its equilibrium price 
D) Government macroeconomic policies that lower the interest rate on bonds 
A) A decrease in monopoly control of the market for the resource 
B) Government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource 
C) Implementation of a price ceiling for the resource below its equilibrium price 
D) Government macroeconomic policies that lower the interest rate on bonds

Question 14

Voluntarism includes methods for dealing with pollution that

Accepted Answer

A) carry no legal authority. 
B) assume the public has been made aware of the environmental damage they are responsible for. 
C) involve trying to coerce polluters to reduce or eliminate pollution voluntarily. 
D) rely on neighborhood vigilantism. 
A) carry no legal authority. 
B) assume the public has been made aware of the environmental damage they are responsible for. 
C) involve trying to coerce polluters to reduce or eliminate pollution voluntarily. 
D) rely on neighborhood vigilantism.

Question 15

Environmental problems occur exclusively in capitalist economies.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Taxing pollution will encourage firms to reduce pollutants dumped in the atmosphere or in streams.

Accepted Answer

A) True 
 B)False

Question 18

Direct controls

Accepted Answer

A) have not been tried in practice, but work in theory. 
B) have been the main instrument used by the United States when dealing with polluting activities. 
C) achieve more success than pollution charges. 
D) achieve more success than pollution allowances. 
A) have not been tried in practice, but work in theory. 
B) have been the main instrument used by the United States when dealing with polluting activities. 
C) achieve more success than pollution charges. 
D) achieve more success than pollution allowances.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Most economists agree that exclusive reliance on direct controls

Accepted Answer

A) is more advantageous than voluntarism and emissions taxes. 
B) has been accepted by most polluting firms. 
C) is cheaper than any other enforcement mechanism. 
D) will penalize firms that can be more efficient using other controls. 
A) is more advantageous than voluntarism and emissions taxes. 
B) has been accepted by most polluting firms. 
C) is cheaper than any other enforcement mechanism. 
D) will penalize firms that can be more efficient using other controls.

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

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

The price of a depletable natural resource last year rose more than expected. The most likely explanation is that

Which of the following statements is not true?

The price elasticity of demand for an exhaustible natural resource tends to

The government prefers a market-based approach to reduce firms' emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of

Emissions permits allow polluters to pay for the right to pollute a specified amount.

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

Compare market price and quantity of steel to socially optimal price and quantity if steel producers ignore soot emitted from their smokestacks. Use a graph to assist your explanation

If the price of garbage removal rises, people will

Environmental damage

Which of the following is an example of detrimental externality?

China, the last large communist society,

Which of the following is most likely to reduce the consumption of an exhaustible natural resource?

Voluntarism includes methods for dealing with pollution that

Environmental problems occur exclusively in capitalist economies.

Economists consider environmental pollution to be a(n)

Taxing pollution will encourage firms to reduce pollutants dumped in the atmosphere or in streams.

Direct controls

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

Most economists agree that exclusive reliance on direct controls

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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