Question 1

Willingness to pay (WTP) is a measure of consumers' willingness to pay for the
 ith unit of output.

Accepted Answer

A) True 
 B)False  True

Question 2

The opportunity cost approach uses shadow prices, which are values of similar
 goods in the public market.

Accepted Answer

A) True 
 B)False  False

Question 3

Figure 7C
  
-Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Which of the following reason(s) can result in a shift of the supply curve as illustrated in the figure?

Accepted Answer

A)  Grape farms have improved access to water. 
B)  New, stricter environmental regulations improve air quality. 
C)  New, lax environmental regulations reduce air quality. 
D)  Both a and b 
E)  Both a and c 
A)  Grape farms have improved access to water. 
B)  New, stricter environmental regulations improve air quality. 
C)  New, lax environmental regulations reduce air quality. 
D)  Both a and b 
E)  Both a and c D

Question 4

A hedonic wage function can be used to reveal how much compensation, on average, a
 high-voltage powerline worker requires to accept more environmental risk of working
 with powerlines.

Accepted Answer

A) True 
 B)False

Question 5

The actual measurement of WTP requires information on the prices, which are
 difficult to obtain for environmental assets.

Accepted Answer

A) True 
 B)False

Question 6

Consumers' surplus is the difference between what consumers are willing to
 accept and what they will to pay.

Accepted Answer

A) True 
 B)False

Question 7

One cannot carry out a contingent valuation survey unless the study participants
 are familiar with the exact nature of the environmental goods or services to be
 valued.

Accepted Answer

A) True 
 B)False

Question 8

If a specific forest ecosystem service can be substituted with a physical structure
 or technology, then the cost of this substitute to replace the forest ecosystem
 service is viewed as the economic value of the forest's service.

Accepted Answer

A) True 
 B)False

Question 9

If the MDC depicts the amount society is willing to pay to avoid damage at the
 margin, then the MDC is essentially the supply curve for environmental quality.

Accepted Answer

A) True 
 B)False

Question 10

Figure 7A
  
-Refer to Figure 7A. Which of the following statements can apply to Figure 7A?

Accepted Answer

A)  The figure represents a demand curve. 
B)  The figure represents an environmental supply curve. 
C)  The figure represents consumers' willingness to pay. 
D)  Both a and c. 
E)  Both band c. 
A)  The figure represents a demand curve. 
B)  The figure represents an environmental supply curve. 
C)  The figure represents consumers' willingness to pay. 
D)  Both a and c. 
E)  Both band c.

Question 11

Figure 7C
  
-Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Also assume that the market for grapes is defined by the demand curve, D, and the supply curve, S1. Which of the following areas represents consumer surplus for this market?

Accepted Answer

A)  Triangle pmcp1. 
B)  Triangle pmbp0. 
C)  Area P1BCP0. 
D)  None of these areas. 
A)  Triangle pmcp1. 
B)  Triangle pmbp0. 
C)  Area P1BCP0. 
D)  None of these areas.

Question 12

Figure 7D
  
-Refer to Figure 7D. Given the hedonic demand function in the figure, if distance from a scenic park is the attribute on the x-axis, then a house with very close proximity to the park will likely
 be priced…

Accepted Answer

A)  Closer to P1 than to P0. 
B)  Closer to P0 than to P0. 
C)  Exactly at P1. 
D)  Exactly at P0. 
E)  There would be no house built near wildlife areas. 
A)  Closer to P1 than to P0. 
B)  Closer to P0 than to P0. 
C)  Exactly at P1. 
D)  Exactly at P0. 
E)  There would be no house built near wildlife areas.

Question 13

Figure 7E
  
-Refer to Figure 7E. Assume that the function in the figure measures WTP for visits to a national park. If the actual cost per visit is set above C0, then it must be that consumer surplus
 is…

Accepted Answer

A)  Equal to producer surplus. 
B)  Greater than area B. 
C)  Equal to area A. 
D)  Equal to area B. 
E)  Smaller than area B. 
A)  Equal to producer surplus. 
B)  Greater than area B. 
C)  Equal to area A. 
D)  Equal to area B. 
E)  Smaller than area B.

Question 14

Since economic valuation of benefit is based on the concept of WTP, this implies that…

Accepted Answer

A)  The benefits from improved environmental quality are equal to the value of the
 environment. 
B)  The benefits from improved environmental quality are greater than the value of the
 environment. 
C)  The benefits from improved environmental quality are the preferences of people for an
 environmental good. 
D)  The benefits from improved environmental quality are greater than the preferences of
 people for an environmental good. 
A)  The benefits from improved environmental quality are equal to the value of the
 environment. 
B)  The benefits from improved environmental quality are greater than the value of the
 environment. 
C)  The benefits from improved environmental quality are the preferences of people for an
 environmental good. 
D)  The benefits from improved environmental quality are greater than the preferences of
 people for an environmental good.

Question 15

Stated preference valuation methods differ from revealed preference valuation
 methods in that the WTP is elicited by asking people to directly state their choices by using survey methods.

Accepted Answer

A) True 
 B)False

Question 16

WTP and WTA are equivalent only if consumers value gains and losses similarly.

Accepted Answer

A) True 
 B)False

Question 17

Figure 7A
  
-Refer to Figure 7A. Which of the following statements can apply to Figure 7A?

Accepted Answer

A)  If Pe is assumed to be the market equilibrium price, all those consumers whose WTP is
 represented by P1 will be expected to decide to purchase this good or service. 
B)  P1 represents what consumers' are willing to pay for the 10th unit of a given good or
 service, Q. 
C)  Pe represents what consumers' are willing to pay for the 25th unit of a given good or
 service, Q. 
D)  All can apply. 
E)  None apply. 
A)  If Pe is assumed to be the market equilibrium price, all those consumers whose WTP is
 represented by P1 will be expected to decide to purchase this good or service. 
B)  P1 represents what consumers' are willing to pay for the 10th unit of a given good or
 service, Q. 
C)  Pe represents what consumers' are willing to pay for the 25th unit of a given good or
 service, Q. 
D)  All can apply. 
E)  None apply.

Question 18

The limitation of these stated preference methods is that they can only measure
 use values.

Accepted Answer

A) True 
 B)False

Question 19

Figure 7D
  
-Refer to Figure 7D. The hedonic demand function in the figure provides information on which of the following?

Accepted Answer

A)  House price for all of the attributes listed. 
B)  Quantity information of all property attributes listed. 
C)  Quantity information of some of the property attributes. 
D)  Quantity information of only one of the property attributes listed. 
E)  None of the above. 
A)  House price for all of the attributes listed. 
B)  Quantity information of all property attributes listed. 
C)  Quantity information of some of the property attributes. 
D)  Quantity information of only one of the property attributes listed. 
E)  None of the above.

Question 20

Environmental features are always found to increase land and house values.

Accepted Answer

A) True 
 B)False

Willingness to pay (WTP) is a measure of consumers' willingness to pay for the i^t^h unit of output.

The opportunity cost approach uses shadow prices, which are values of similar goods in the public market.

Figure 7C -Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Which of the following reason(s) can result in a shift of the supply curve as illustrated in the figure?

A hedonic wage function can be used to reveal how much compensation, on average, a high-voltage powerline worker requires to accept more environmental risk of working with powerlines.

The actual measurement of WTP requires information on the prices, which are difficult to obtain for environmental assets.

Consumers' surplus is the difference between what consumers are willing to accept and what they will to pay.

One cannot carry out a contingent valuation survey unless the study participants are familiar with the exact nature of the environmental goods or services to be valued.

If a specific forest ecosystem service can be substituted with a physical structure or technology, then the cost of this substitute to replace the forest ecosystem service is viewed as the economic value of the forest's service.

If the MDC depicts the amount society is willing to pay to avoid damage at the margin, then the MDC is essentially the supply curve for environmental quality.

Figure 7A -Refer to Figure 7A. Which of the following statements can apply to Figure 7A?

Figure 7C -Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Also assume that the market for grapes is defined by the demand curve, D, and the supply curve, S1. Which of the following areas represents consumer surplus for this market?

Figure 7D -Refer to Figure 7D. Given the hedonic demand function in the figure, if distance from a scenic park is the attribute on the x-axis, then a house with very close proximity to the park will likely be priced…

Figure 7E -Refer to Figure 7E. Assume that the function in the figure measures WTP for visits to a national park. If the actual cost per visit is set above C0, then it must be that consumer surplus is…

Since economic valuation of benefit is based on the concept of WTP, this implies that…

Stated preference valuation methods differ from revealed preference valuation methods in that the WTP is elicited by asking people to directly state their choices by using survey methods.

WTP and WTA are equivalent only if consumers value gains and losses similarly.

Figure 7A -Refer to Figure 7A. Which of the following statements can apply to Figure 7A?

The limitation of these stated preference methods is that they can only measure use values.

Figure 7D -Refer to Figure 7D. The hedonic demand function in the figure provides information on which of the following?

Environmental features are always found to increase land and house values.

The Natural Environment and the Human Economy: the Neoclassical Perspective

The Natural Environment and the Human Economy: an Ecological Perspective

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

The Economic Theory of Pollution Control

The Economics of Environmental Regulation I: Emission Standards and Effluent Charge

The Economics of Environmental Regulation Ii: Transferable Emission Credits, and the Macroeconomic Effects of Environmental Regulation

Frameworks for Assessing the Worthiness of Environmental Projects

The Economics of Climate Change

The Economics of Biodiversity

Biophysical Limits to Economic Growth: the Malthusianneo-Malthusianecological Economics Perspectives

Biophysical Limits to Economic Growth: the Neoclassical Perspective

The Economics of Sustainability

Green Accounting and Alternative Indicators of Sustainability

Filters

Exam 7: Alternative Methods of Valuation of Environmental Goods and Services

Willingness to pay (WTP) is a measure of consumers' willingness to pay for the ith unit of output.

The opportunity cost approach uses shadow prices, which are values of similar goods in the public market.

Figure 7C -Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Which of the following reason(s) can result in a shift of the supply curve as illustrated in the figure?

A hedonic wage function can be used to reveal how much compensation, on average, a high-voltage powerline worker requires to accept more environmental risk of working with powerlines.

The actual measurement of WTP requires information on the prices, which are difficult to obtain for environmental assets.

Consumers' surplus is the difference between what consumers are willing to accept and what they will to pay.

One cannot carry out a contingent valuation survey unless the study participants are familiar with the exact nature of the environmental goods or services to be valued.

If a specific forest ecosystem service can be substituted with a physical structure or technology, then the cost of this substitute to replace the forest ecosystem service is viewed as the economic value of the forest's service.

If the MDC depicts the amount society is willing to pay to avoid damage at the margin, then the MDC is essentially the supply curve for environmental quality.

Figure 7A -Refer to Figure 7A. Which of the following statements can apply to Figure 7A?

Figure 7C -Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Also assume that the market for grapes is defined by the demand curve, D, and the supply curve, S1. Which of the following areas represents consumer surplus for this market?

Figure 7D -Refer to Figure 7D. Given the hedonic demand function in the figure, if distance from a scenic park is the attribute on the x-axis, then a house with very close proximity to the park will likely be priced…

Figure 7E -Refer to Figure 7E. Assume that the function in the figure measures WTP for visits to a national park. If the actual cost per visit is set above C0, then it must be that consumer surplus is…

Since economic valuation of benefit is based on the concept of WTP, this implies that…

Stated preference valuation methods differ from revealed preference valuation methods in that the WTP is elicited by asking people to directly state their choices by using survey methods.

WTP and WTA are equivalent only if consumers value gains and losses similarly.

Figure 7A -Refer to Figure 7A. Which of the following statements can apply to Figure 7A?

The limitation of these stated preference methods is that they can only measure use values.

Figure 7D -Refer to Figure 7D. The hedonic demand function in the figure provides information on which of the following?

Environmental features are always found to increase land and house values.

The Natural Environment and the Human Economy: the Neoclassical Perspective

The Natural Environment and the Human Economy: an Ecological Perspective

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

The Economic Theory of Pollution Control

The Economics of Environmental Regulation I: Emission Standards and Effluent Charge

The Economics of Environmental Regulation Ii: Transferable Emission Credits, and the Macroeconomic Effects of Environmental Regulation

Frameworks for Assessing the Worthiness of Environmental Projects

The Economics of Climate Change

The Economics of Biodiversity

Biophysical Limits to Economic Growth: the Malthusianneo-Malthusianecological Economics Perspectives

Biophysical Limits to Economic Growth: the Neoclassical Perspective

The Economics of Sustainability

Green Accounting and Alternative Indicators of Sustainability

Filters

Willingness to pay (WTP) is a measure of consumers' willingness to pay for the i^t^h unit of output.