Exam 22: Government and the Market

The_________approach to the environment regards the earth and its resources as private or common assets to be used as important in themselves and to be subject to only minor, if any, degradation.

Which of the following would be likely to reduce urban road congestion? If you think the answer is uncertain, then specify your assumptions when making your answer. a) An increase in the tax on petrol b) An increase in the road tax c) Bus lanes d) An increased tax on new cars e) Electronic road pricing (i.e. charges to use roads through the use of meters in cars and smart cards) f) Increased car parking space

The game theory approach to countries' decision- making on cutting greenhouse gases shows that the situation resembles a 'prisoner's dilemma'. This means that, because taking action involves costs, it is in the self- interest of an individual country to ___- while other countries _______.

UK regulation of public utilities focuses on the prices that would be justified if the industry were efficient.

Which of the following was not identified by the Stern Report as essential to cut emissions?

The Bush administration's approach to global warming favoured

In the long run, the supply of road space is not fixed. In identifying the socially efficient level of road construction, the authorities need to find the point at which

In order to encourage competition in the phone industry, the regulators have ordered BT to keep its wholesale prices________ than it would wish and its prices to the public________than it would wish.

Why is it difficult to reach international agreements on pollution?

Sir Nicholas Stern claimed that climate change is the 'greatest and widest ranging market failure ever seen'.

The optimum use of the environment is the same for everyone.

What is likely to be the cross- elasticity of demand between the demand for car travel and train fares?

Briefly outline the climate change developments beyond 2007.

Which of the following are features of a tradable permits scheme?

Privatisation does not prevent market failure.

A fuel tax is a marginal (private) cost to the motorist.

The 'price' to the motorist of any journey is the to the motorist.

When regulators start to act in the interests of the industry being regulated, this is called regulatory capture.

Franchising [leasing] public assets for a number of years has been used in the UK in which of the following industries?

Give three examples of external costs of motoring.