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

The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth and protects humans from ultraviolet radiation. Output of this substance has been restricted by a licensing system where producers have to bid in the open market for licenses to produce them in specified quantities. This is an example of dealing with externalities by

If a firm that emits a form of pollution is also a monopolist, is the firm more likely to be allocatively efficient when compared to a nonmonopoly polluter? Explain.

Direct controls do not have a clear advantage where

One of the conclusions of A. C. Pigou was that

Individuals, firms, and government agencies deplete clean water and clean air because

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.

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

Since World War II,

If suppliers of garbage collection services charged the full costs of providing the service, the supply curve would

Direct controls have traditionally been used heavily to control pollution in the United States.

During the Trump administration, environmental fines and prosecutions

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

If not recycled, an input used in production ultimately winds up as a waste product.

To protect the environment, governments in the United States have mainly used

Recycling in the United States in recent years

Identify the economist who first addressed the environmental problem in terms of externalities.

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

Economists believe that externalities can be remedied by market methods.

The share of the burden of an emissions tax on output borne by the consumer of the polluting output will rise as

Explain why environmentally minded firms in a competitive industry will find it difficult to take environmental action.