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

The price of an exhaustible resource sold in a perfectly competitive market in which technology and consumer preferences do not change over time will tend to

Some of the newer pollutants that have appeared

If a resource is in fact becoming scarcer, then one should expect

Pollution taxes are intended to

The use of tax penalties to control pollution represents a

One of the virtues of rising resource prices is they encourage innovation, especially the discovery of other more abundant resources.

Increasing GDP generally causes increases in problems of waste disposal.

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.

Unexpected discoveries of mineral reserves will ordinarily cause the price of these minerals to increase.

How do rising prices slow resource depletion?

Many of the new pollutants to which the world has been subjected are

By providing free garbage removal, a community

Increasing environmental awareness in the United States has occurred with increasing GDP, which has reduced concerns about basic needs.

Economic theory predicted that the price of a depletable resource would rise by 10 percent. In reality, the price fell by 5 percent. Which of the following events could explain this discrepancy?

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

Voluntary programs, direct controls, and emissions taxes are all equally effective ways of controlling pollution.

Which of the following statements is false?

The external costs of alcohol consumption are related to, among other things, death and injury related to auto accidents caused by drunk drivers. These costs have been estimated to be about 47 cents per ounce of alcohol consumed. Taxes on alcohol amount to 23 cents per ounce. This suggests that alcohol consumption is (i)greater than the efficient or optimal amount; (ii)should be reduced to zero to eliminate the externality.

Centrally planned economies like China produce relatively little pollution.

The legal system imposes large financial penalties on firms caught violating Environmental Protection Agency guidelines. The EPA's standards program is thus an example of a