Exam 3: Ecological and Technological Determinants of the Trade-Off Between Economic Activity and Environmental Quality

Total economic value equals the sum of ecosystem services and intrinsic value.

Figure 3A -Refer to Figure 3A. Assume that one starts at any point that indicates an optimal pollution level. Further assume that there is an educational campaign of awareness that results in a change in social preference such that environmental quality is believed to be of utmost importance - increasing its demand. Which panel or panels would indicate a movement in the curves reflecting this social preference change?

Pollution output, in some form, can never be avoid in the production process.

A poorly cared-for neighborhood park that reduces the property values of nearby homes is an example of a negative externality.

Ecological economists always assume that greater utility is derived from the quality of the physical environment than from the consumption of goods and services.

Generally, pollution reduces the capacity of an environmental medium to withstand further pollution.

Ocean fisheries is good example of a common property resource.

Which one of the following is most likely to be considered a nonrival good?

Hardin did recognize that the government can use coercive power to correct externalities arising from free access to common property resources.

Which one of the following statements about common property resources is false?

Rational behavior requires making a trade-off between consuming goods and loss in environmental quality.

There is always a given minimum amount of economic goods that can be produced without inflicting damage to the natural environment.

Which one of the following is not an example of a negative externality?

Figure 3A -Refer to Figure 3A. Assume that one starts at any point that indicates an optimal pollution level. Further assume that there is a technological advancement that shifts the marginal damage cost downward and to the right. The new optimal level of pollution will be at which point?

Which one of the following is the best example of a common property resource?

The assimilative capacity of the environment is limited in its ability to absorb water and air wastes, but unlimited with regard to its ability to assimilate air wastes, some of which can escape to outer space.

Which of the following is true in regard to the optimal level of pollution?

The Coase theorem states that an optimal level of pollution reduction can be achieved by assigning property rights only to the pollutee.

Stock pollutants have many biological organisms that help degrade them into harmless substances.

Which of the following statements about the tragedy of the commons is false?