Question 1

Which of the following is most likely to have the strongest demand for environmental quality?

Accepted Answer

A) countries with water pollution problems 
B) poor countries 
C) countries with air pollution problems 
D) wealthy countries 
A) countries with water pollution problems 
B) poor countries 
C) countries with air pollution problems 
D) wealthy countries

Question 2

When it comes to environmental policy,

Accepted Answer

A) choices are influenced by the costs and benefits that decision makers expect. 
B) values are subjective, as in other areas of the economy. 
C) policy choices often have unintended secondary effects. 
D) all of the above are true. 
A) choices are influenced by the costs and benefits that decision makers expect. 
B) values are subjective, as in other areas of the economy. 
C) policy choices often have unintended secondary effects. 
D) all of the above are true.

Question 3

Pollution from a privately owned factory that seriously harms a privately owned forest will, if property rights are strongly protected,

Accepted Answer

A) not result in penalties to the polluter, who has a right to use his property as he wishes. 
B) make the polluter liable for any damages done to the forest. 
C) be ignored under the law, in favor of the polluting factory owner. 
D) never occur. 
A) not result in penalties to the polluter, who has a right to use his property as he wishes. 
B) make the polluter liable for any damages done to the forest. 
C) be ignored under the law, in favor of the polluting factory owner. 
D) never occur.

Question 4

The scientific evidence on the causes and consequences of global warming

Accepted Answer

A) is clear and indisputable. 
B) is uncertain and variable. 
C) indicates global warming should be stopped regardless of cost. 
D) is of no importance to economists. 
A) is clear and indisputable. 
B) is uncertain and variable. 
C) indicates global warming should be stopped regardless of cost. 
D) is of no importance to economists.

Question 5

It can be difficult to define and enforce property rights against damaging pollutants when

Accepted Answer

A) many polluters are harming one person. 
B) many polluters harm the same large group of people with the same pollutant. 
C) the harms are difficult to quantify. 
D) All of the above are true. 
A) many polluters are harming one person. 
B) many polluters harm the same large group of people with the same pollutant. 
C) the harms are difficult to quantify. 
D) All of the above are true.

Question 6

Providing citizens with enforceable property rights to resources

Accepted Answer

A) increases resource conservation and decreases wasteful resource use. 
B) promotes economic prosperity and thus increases demand for environmental quality. 
C) provides people with a strong incentive not to damage the privately owned resources of others. 
D) does all of the above. 
A) increases resource conservation and decreases wasteful resource use. 
B) promotes economic prosperity and thus increases demand for environmental quality. 
C) provides people with a strong incentive not to damage the privately owned resources of others. 
D) does all of the above.

Question 7

When the federal government owns land resources, such as parks, that are funded by tax dollars,

Accepted Answer

A) park mangers receive full information about visitor desires simply by asking visitors. 
B) public park managers have the same incentives as private park managers, where visitors pay at least the actual costs of use. 
C) park managers devote much time and effort to satisfying congressional desires instead of visitor desires. 
D) park managers will be well-informed of visitor demands regardless of the funding mechanism. 
A) park mangers receive full information about visitor desires simply by asking visitors. 
B) public park managers have the same incentives as private park managers, where visitors pay at least the actual costs of use. 
C) park managers devote much time and effort to satisfying congressional desires instead of visitor desires. 
D) park managers will be well-informed of visitor demands regardless of the funding mechanism.

Question 8

Pollution charges will be efficient if

Accepted Answer

A) the charge is just equal to the cost borne by others from the pollution. 
B) the charge is greater than the cost borne by others from the pollution. 
C) the charge is less than the cost borne by others from the pollution. 
D) none of the above. 
A) the charge is just equal to the cost borne by others from the pollution. 
B) the charge is greater than the cost borne by others from the pollution. 
C) the charge is less than the cost borne by others from the pollution. 
D) none of the above.

Question 9

The current empirical evidence indicates that

Accepted Answer

A) changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide. 
B) the increase in carbon dioxide, over thousands of years, is definitely the cause of global warming. 
C) if global warming continues as most models predict, then in the next 100 years the sea levels clearly will rise by more than 10 feet. 
D) none of the above is true. 
A) changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide. 
B) the increase in carbon dioxide, over thousands of years, is definitely the cause of global warming. 
C) if global warming continues as most models predict, then in the next 100 years the sea levels clearly will rise by more than 10 feet. 
D) none of the above is true.

Question 10

Which of the following is true?

Accepted Answer

A) All types of environmental problems can be solved merely by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Income levels exert little impact on the demand for environmental quality. 
D) Markets often result in outcomes that are inefficient when it is difficult to assign and enforce property rights. 
A) All types of environmental problems can be solved merely by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Income levels exert little impact on the demand for environmental quality. 
D) Markets often result in outcomes that are inefficient when it is difficult to assign and enforce property rights.

Question 11

Besides the scientific uncertainties, which of the following has kept most economists from recommending strong regulations to reduce emissions of carbon dioxide?

Accepted Answer

A) consumer ignorance 
B) the Kyoto Protocol 
C) the potential for special-interest involvement 
D) The Clean Air Act of 1990 
A) consumer ignorance 
B) the Kyoto Protocol 
C) the potential for special-interest involvement 
D) The Clean Air Act of 1990

Question 12

The Kyoto Protocol

Accepted Answer

A) is an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels. 
B) should be rejected because the benefits of a warming climate will unquestionably be greater than the costs. 
C) would have no net effect on the global economy. 
D) was ratified by the Congress of the United States. 
A) is an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels. 
B) should be rejected because the benefits of a warming climate will unquestionably be greater than the costs. 
C) would have no net effect on the global economy. 
D) was ratified by the Congress of the United States.

Question 13

Which of the following is true?

Accepted Answer

A) All types of environmental problems can be solved merely by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Income levels exert little impact on the demand for environmental quality. 
D) Markets often result in outcomes that are inefficient when it is difficult to assign and enforce property rights. 
A) All types of environmental problems can be solved merely by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Income levels exert little impact on the demand for environmental quality. 
D) Markets often result in outcomes that are inefficient when it is difficult to assign and enforce property rights.

Question 14

Which of the following will likely have the strongest demand for large expenditures on environmental quality?

Accepted Answer

A) wealthy countries 
B) poor countries 
C) countries with air pollution problems 
D) countries with water pollution problems 
A) wealthy countries 
B) poor countries 
C) countries with air pollution problems 
D) countries with water pollution problems

Question 15

Overfishing in the ocean often

Accepted Answer

A) is easily solved by shortening the fishing season. 
B) is not caused by better technologies, which today's fishers would not use if they harmed the resource. 
C) occurs only when regulators fail to regulate due to corruption. 
D) is caused by many boats racing to catch more fish in a very short season. 
A) is easily solved by shortening the fishing season. 
B) is not caused by better technologies, which today's fishers would not use if they harmed the resource. 
C) occurs only when regulators fail to regulate due to corruption. 
D) is caused by many boats racing to catch more fish in a very short season.

Question 16

Economic analysis implies that one of the most effective ways to deal with potential damages from environmental pollution is to

Accepted Answer

A) declare the relevant resources to be public goods, owned by the public. 
B) establish and enforce property rights for the resources that are being damaged, if possible. 
C) allow the government to take over and control all natural resources. 
D) enact legislation that makes all environmental pollution illegal. 
A) declare the relevant resources to be public goods, owned by the public. 
B) establish and enforce property rights for the resources that are being damaged, if possible. 
C) allow the government to take over and control all natural resources. 
D) enact legislation that makes all environmental pollution illegal.

Question 17

When a park is funded by visitors, but not by taxpayers in general,

Accepted Answer

A) there will be too few parks, because most people will not pay to use a park. 
B) visitors will be better served, because poor service would lead to reductions in revenues. 
C) park budgets will decline. 
D) park quality will decline. 
A) there will be too few parks, because most people will not pay to use a park. 
B) visitors will be better served, because poor service would lead to reductions in revenues. 
C) park budgets will decline. 
D) park quality will decline.

Question 18

With regard to environmental programs and regulations, economic analysis indicates that

Accepted Answer

A) environmental quality is something that people value and, therefore, are willing to pay for. 
B) people value many other things, but environmental values always come first. 
C) income levels exert little impact on the demand for environmental quality. 
D) the cost of an environmental policy matters little if the policy provides environmental health benefits. 
A) environmental quality is something that people value and, therefore, are willing to pay for. 
B) people value many other things, but environmental values always come first. 
C) income levels exert little impact on the demand for environmental quality. 
D) the cost of an environmental policy matters little if the policy provides environmental health benefits.

Question 19

Individual transferable quotas (ITQs) have been shown to

Accepted Answer

A) increase the value of fisheries but reduce the safety of fishers as the season is shortened. 
B) end overfishing by making the use of efficient technology illegal. 
C) increase the safety of fishing but not the value to consumers of the product. 
D) increase the value to consumers of the product and raise the price received by fishers. 
A) increase the value of fisheries but reduce the safety of fishers as the season is shortened. 
B) end overfishing by making the use of efficient technology illegal. 
C) increase the safety of fishing but not the value to consumers of the product. 
D) increase the value to consumers of the product and raise the price received by fishers.

Question 20

The tragedy of the commons refers to a situation in which a resource is overexploited because it is not

Accepted Answer

A) a common resource. 
B) privately owned. 
C) a public good. 
D) scarce. 
A) a common resource. 
B) privately owned. 
C) a public good. 
D) scarce.

Exam 27: Appendix: Difficult Environmental Cases and the Role of Government

Which of the following is most likely to have the strongest demand for environmental quality?

When it comes to environmental policy,

Pollution from a privately owned factory that seriously harms a privately owned forest will, if property rights are strongly protected,

The scientific evidence on the causes and consequences of global warming

It can be difficult to define and enforce property rights against damaging pollutants when

Providing citizens with enforceable property rights to resources

When the federal government owns land resources, such as parks, that are funded by tax dollars,

Pollution charges will be efficient if

The current empirical evidence indicates that

Which of the following is true?

Besides the scientific uncertainties, which of the following has kept most economists from recommending strong regulations to reduce emissions of carbon dioxide?

The Kyoto Protocol

Which of the following is true?

Which of the following will likely have the strongest demand for large expenditures on environmental quality?

Overfishing in the ocean often

Economic analysis implies that one of the most effective ways to deal with potential damages from environmental pollution is to

When a park is funded by visitors, but not by taxpayers in general,

With regard to environmental programs and regulations, economic analysis indicates that

Individual transferable quotas (ITQs) have been shown to

The tragedy of the commons refers to a situation in which a resource is overexploited because it is not

The Economic Approach

A: Some Tools of the Economist

B: Some Tools of the Economist

A: Supply, Demand, and the Market Process

B: Supply, Demand, and the Market Process

A: Supply and Demand: Applications and Extensions

B: Supply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Consumer Choice and Elasticity

A: Costs and the Supply of Goods

B: Costs and the Supply of Goods

A: Price Takers and the Competitive Process

B: Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

A: Price-Searcher Markets With High Entry Barriers

B: Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Appendix: Government Spending and Taxation

Appendix: the Economics of Social Security

Appendix: the Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Appendix: Great Debates in Economics: Keynes Versus Hayek

Appendix: the Crisis of 2008: Causes and Lessons for the Future

Appendix: Lessons From the Great Depression

Appendix: the Economics of Healthcare

Appendix:education: Problems and Performance

Appendix: Earnings Differences Between Men and Women

Appendix: the Question of Resource Exhaustion

Appendix: Do Labor Unions Increase the Wages of Workers

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