Question 1

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 clearly the cause of global warming. 
C) if global warming continues for another century, as most models forecast, the sea levels will clearly rise substantially, imposing costs much larger than the cost of preventing the warming. 
D) the earth has warmed a little more than one degree Fahrenheit in the past century. 
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 clearly the cause of global warming. 
C) if global warming continues for another century, as most models forecast, the sea levels will clearly rise substantially, imposing costs much larger than the cost of preventing the warming. 
D) the earth has warmed a little more than one degree Fahrenheit in the past century.

Question 2

When the federal government owns parks that are funded by tax dollars

Accepted Answer

A) park managers receive full information about visitor desires and make decisions accordingly. 
B) the same incentive structure exists for public park managers as private park managers. 
C) park managers devote much time and effort to satisfying political desires instead of visitor desires. 
D) park managers will be less likely to mismanage the park. 
A) park managers receive full information about visitor desires and make decisions accordingly. 
B) the same incentive structure exists for public park managers as private park managers. 
C) park managers devote much time and effort to satisfying political desires instead of visitor desires. 
D) park managers will be less likely to mismanage the park.

Question 3

When it is difficult to assign and enforce property rights,

Accepted Answer

A) markets result in outcomes that are often inefficient. 
B) courts can easily negotiate efficient outcomes. 
C) establishing better property rights is always the best way to deal with environmental problems. 
D) government regulation can never improve on the outcomes generated by competitive markets. 
A) markets result in outcomes that are often inefficient. 
B) courts can easily negotiate efficient outcomes. 
C) establishing better property rights is always the best way to deal with environmental problems. 
D) government regulation can never improve on the outcomes generated by competitive markets.

Question 4

What is the economically efficient level of emissions from a particular source?

Accepted Answer

A) zero 
B) the quantity at which the marginal cost to achieve lower emissions equals the additional value of reducing pollution 
C) the level determined by EPA (Environmental Protection Agency) scientists that will save the most lives 
D) the level emitted when markets are allowed to function with no government regulation 
A) zero 
B) the quantity at which the marginal cost to achieve lower emissions equals the additional value of reducing pollution 
C) the level determined by EPA (Environmental Protection Agency) scientists that will save the most lives 
D) the level emitted when markets are allowed to function with no government regulation

Question 5

Most of our environmental problems exist because of

Accepted Answer

A) a lack of enforced and easily traded property rights. 
B) consumer ignorance. 
C) profit maximization on the part of business firms. 
D) the failure of political officials to regulate business activities. 
A) a lack of enforced and easily traded property rights. 
B) consumer ignorance. 
C) profit maximization on the part of business firms. 
D) the failure of political officials to regulate business activities.

Question 6

Higher levels of carbon dioxide may have led, over the past century, to approximately a

Accepted Answer

A) 1 degree (F) warming of the earth. 
B) 10 degree (F) warming of the earth. 
C) 1 degree (F) cooling of the earth. 
D) 10 degree (F) cooling of the earth. 
A) 1 degree (F) warming of the earth. 
B) 10 degree (F) warming of the earth. 
C) 1 degree (F) cooling of the earth. 
D) 10 degree (F) cooling of the earth.

Question 7

Which of the following is true?

Accepted Answer

A) All types of environmental problems can be solved simply by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Regulation nearly always leads to economically efficient outcomes. 
D) Government regulation is subject to the same problems caused by lack of information and lack of incentives for economic efficiency that plagued centrally planned economies. 
A) All types of environmental problems can be solved simply by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Regulation nearly always leads to economically efficient outcomes. 
D) Government regulation is subject to the same problems caused by lack of information and lack of incentives for economic efficiency that plagued centrally planned economies.

Question 8

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

Question 9

Government regulation is

Accepted Answer

A) subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies. 
B) the only reliable way to improve environmental quality. 
C) not subject to political concerns when it comes to environmental quality. 
D) the most economically efficient way to reduce greenhouse gases. 
A) subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies. 
B) the only reliable way to improve environmental quality. 
C) not subject to political concerns when it comes to environmental quality. 
D) the most economically efficient way to reduce greenhouse gases.

Question 10

An economist would argue that global warming is

Accepted Answer

A) unquestionably a human-generated problem that should be stopped immediately at all costs. 
B) simply fear mongering, for there is no scientific evidence that the average temperature on earth is changing. 
C) likely to cause massive starvation as temperatures on earth rise, reducing agricultural productivity. 
D) a serious issue that may best be addressed primarily by making changes as problems occur in the future. 
A) unquestionably a human-generated problem that should be stopped immediately at all costs. 
B) simply fear mongering, for there is no scientific evidence that the average temperature on earth is changing. 
C) likely to cause massive starvation as temperatures on earth rise, reducing agricultural productivity. 
D) a serious issue that may best be addressed primarily by making changes as problems occur in the future.

Question 11

Economic analysis indicates that environmental quality

Accepted Answer

A) is something that people value, and therefore are willing to pay for. 
B) should always be regulated by the government. 
C) is something people should be forced to pay for no matter what their income levels. 
D) is not important to most people. 
A) is something that people value, and therefore are willing to pay for. 
B) should always be regulated by the government. 
C) is something people should be forced to pay for no matter what their income levels. 
D) is not important to most people.

Question 12

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include

Accepted Answer

A) fuel-use reductions that would slow economic growth in most of the world. 
B) economizing on energy use in ways that would, on balance, increase economic growth. 
C) very few costs that would affect resource-conserving industrial nations such as the United States. 
D) high costs in developing nations such as India but not in industrial nations. 
A) fuel-use reductions that would slow economic growth in most of the world. 
B) economizing on energy use in ways that would, on balance, increase economic growth. 
C) very few costs that would affect resource-conserving industrial nations such as the United States. 
D) high costs in developing nations such as India but not in industrial nations.

Question 13

"Since the wind and the flowing rivers can take away industrial waste without charge, polluting is a profitable activity even when people are seriously harmed downwind or downstream, unless environmental regulators stop it." This statement is

Accepted Answer

A) false if the property rights of downwind or downstream individuals are protected. 
B) true if the property rights of industrialists are enforced. 
C) never true. 
D) always true. 
A) false if the property rights of downwind or downstream individuals are protected. 
B) true if the property rights of industrialists are enforced. 
C) never true. 
D) always true.

Question 14

Most scientists agree that

Accepted Answer

A) if global warming continues for another century, the sea levels will rise substantially, imposing costs much larger than the cost of preventing the warming. 
B) the earth has warmed about one degree Fahrenheit in the past century. 
C) global warming will substantially reduce future rates of economic growth and lead to sharp reductions in living standards. 
D) regulations like those outlined in the Kyoto Protocol will substantially reduce global warming. 
A) if global warming continues for another century, the sea levels will rise substantially, imposing costs much larger than the cost of preventing the warming. 
B) the earth has warmed about one degree Fahrenheit in the past century. 
C) global warming will substantially reduce future rates of economic growth and lead to sharp reductions in living standards. 
D) regulations like those outlined in the Kyoto Protocol will substantially reduce global warming.

Question 15

Which of the following is the most efficient way to reduce pollution emissions?

Accepted Answer

A) emission standards that cap allowable pollution 
B) government pollution charges or taxes 
C) legislated regulations limiting the quantity of emissions allowed by each firm 
D) enforcement of property rights, when those rights are well-defined and transaction costs are low 
A) emission standards that cap allowable pollution 
B) government pollution charges or taxes 
C) legislated regulations limiting the quantity of emissions allowed by each firm 
D) enforcement of property rights, when those rights are well-defined and transaction costs are low

Question 16

When is the definition and enforcement of property rights especially difficult?

Accepted Answer

A) When many polluters harm a large group of people with the same pollutant. 
B) When a single polluter is harming a single person or entity. 
C) When land is owned by a corporation. 
D) When the benefits of prosecution are clear. 
A) When many polluters harm a large group of people with the same pollutant. 
B) When a single polluter is harming a single person or entity. 
C) When land is owned by a corporation. 
D) When the benefits of prosecution are clear.

Question 17

The fish in the ocean are

Accepted Answer

A) allocated efficiently because there are no limitations on entry into the ocean fisheries business. 
B) scarce, but only because of the highly restrictive regulations imposed by various nations. 
C) a commonly owned, open access resource and therefore they are often over-exploited. 
D) privately owned and therefore they are allocated efficiently. 
A) allocated efficiently because there are no limitations on entry into the ocean fisheries business. 
B) scarce, but only because of the highly restrictive regulations imposed by various nations. 
C) a commonly owned, open access resource and therefore they are often over-exploited. 
D) privately owned and therefore they are allocated efficiently.

Question 18

Which of the following is the most efficient method to reduce pollution emissions?

Accepted Answer

A) government pollution charges or taxes 
B) non-tradable emission standards that cap allowable pollution 
C) common law enforcement of property rights, when those rights are well-defined and transaction costs are low 
D) legislated regulations limiting the quantity of emissions allowed by each firm 
A) government pollution charges or taxes 
B) non-tradable emission standards that cap allowable pollution 
C) common law enforcement of property rights, when those rights are well-defined and transaction costs are low 
D) legislated regulations limiting the quantity of emissions allowed by each firm

Question 19

(I) Richer people are more willing to make sacrifices to gain greater environmental quality. (II) Poor countries are not as resilient when faced with the threats caused by environmental degradation.

Accepted Answer

A) Both I and II are true. 
B) I is true; II is false. 
C) I is false; II is true. 
D) Both I and II are false. 
A) Both I and II are true. 
B) I is true; II is false. 
C) I is false; II is true. 
D) Both I and II are false.

Question 20

For a privately owned business in a competitive market setting,

Accepted Answer

A) reducing resource use while producing the same output adds to profit and typically reduces waste products and thus cuts pollution as well. 
B) when property rights are well-defined and strictly enforced, the firm will be able to pollute air and water without having to bear the cost of the damages imposed on others. 
C) wasteful use of resources results in more pollution but greater profit. 
D) reducing pollution almost never pays. 
A) reducing resource use while producing the same output adds to profit and typically reduces waste products and thus cuts pollution as well. 
B) when property rights are well-defined and strictly enforced, the firm will be able to pollute air and water without having to bear the cost of the damages imposed on others. 
C) wasteful use of resources results in more pollution but greater profit. 
D) reducing pollution almost never pays.

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

Empirical evidence indicates that

When the federal government owns parks that are funded by tax dollars

When it is difficult to assign and enforce property rights,

What is the economically efficient level of emissions from a particular source?

Most of our environmental problems exist because of

Higher levels of carbon dioxide may have led, over the past century, to approximately a

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?

Government regulation is

An economist would argue that global warming is

Economic analysis indicates that environmental quality

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include

"Since the wind and the flowing rivers can take away industrial waste without charge, polluting is a profitable activity even when people are seriously harmed downwind or downstream, unless environmental regulators stop it." This statement is

Most scientists agree that

Which of the following is the most efficient way to reduce pollution emissions?

When is the definition and enforcement of property rights especially difficult?

The fish in the ocean are

Which of the following is the most efficient method to reduce pollution emissions?

(I) Richer people are more willing to make sacrifices to gain greater environmental quality. (II) Poor countries are not as resilient when faced with the threats caused by environmental degradation.

For a privately owned business in a competitive market setting,

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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