Question 1

Pollution taxes are more efficient in cleaning up the environment than direct controls.What role is there for direct controls?

Accepted Answer

A) They are useful standby mechanisms. 
B) They are useful if it is decided to prohibit the substance altogether. 
C) They are useful where dependable metering devices are not available or prohibitively costly to install. 
D) All of the above are true. 
A) They are useful standby mechanisms. 
B) They are useful if it is decided to prohibit the substance altogether. 
C) They are useful where dependable metering devices are not available or prohibitively costly to install. 
D) All of the above are true.

Question 2

Regarding the causes of pollution, economists believe that:

Accepted Answer

A) the pricing system has failed. 
B) the public interest requires that pollution to be reduced below its market level. 
C) a firm pollutes the air and water because they are free. 
D) All of the above are correct. 
A) the pricing system has failed. 
B) the public interest requires that pollution to be reduced below its market level. 
C) a firm pollutes the air and water because they are free. 
D) All of the above are correct.

Question 3

How does the price system cope with depletable resources?

Accepted Answer

The rule is that under perfect competiti

Question 4

The supply curve of a natural resource like oil has a positive slope because

Accepted Answer

A) the supply becomes closer to exhaustion as demand rises. 
B) it becomes more costly to find and develop supplies as demand rises. 
C) rents rise as output increases. 
D) indirect taxes rise with output. 
A) the supply becomes closer to exhaustion as demand rises. 
B) it becomes more costly to find and develop supplies as demand rises. 
C) rents rise as output increases. 
D) indirect taxes rise with output.

Question 5

The worst and most difficult to extract resources are used first.

Accepted Answer

A) True 
 B)False

Question 6

Rising prices help control the process of resource depletion by

Accepted Answer

A) discouraging consumption and waste. 
B) stimulating more efficient use of the depletable resource. 
C) encouraging resource-saving innovation. 
D) doing all of the above. 
A) discouraging consumption and waste. 
B) stimulating more efficient use of the depletable resource. 
C) encouraging resource-saving innovation. 
D) doing all of the above.

Question 7

Some of the newer pollutants that have appeared

Accepted Answer

A) are far more visible to the eye than older pollution. 
B) cause damage that is easily reversible. 
C) pose no significant long-term hazards. 
D) are far more dangerous than older forms of pollution. 
A) are far more visible to the eye than older pollution. 
B) cause damage that is easily reversible. 
C) pose no significant long-term hazards. 
D) are far more dangerous than older forms of pollution.

Question 8

Suppose that because of climatic conditions, the smog levels in Los Angeles suddenly soar to dangerous levels.The most successful policy in this case would be

Accepted Answer

A) direct controls to limit driving. 
B) taxes on drivers at rush hours. 
C) voluntary cooperation to reduce driving. 
D) removal of autos with excessive emissions. 
A) direct controls to limit driving. 
B) taxes on drivers at rush hours. 
C) voluntary cooperation to reduce driving. 
D) removal of autos with excessive emissions.

Question 9

What is new about environmental problems today is

Accepted Answer

A) that for the first time in history we have environmental problems. 
B) the increased rate at which air and water pollution is occurring in the United States. 
C) the amount of attention the community now gives them. 
D) that environmental problems with pollution and garbage disposal have almost completely disappeared. 
A) that for the first time in history we have environmental problems. 
B) the increased rate at which air and water pollution is occurring in the United States. 
C) the amount of attention the community now gives them. 
D) that environmental problems with pollution and garbage disposal have almost completely disappeared.

Question 10

Will depletable resources such as oil, coal, and aluminum be exhausted if their prices are left to the market?

Accepted Answer

No.As supplies decrease, price will rise

Question 11

If suppliers of garbage collection services charged the full costs of providing the service, the supply curve would

Accepted Answer

A) change to a positive slope. 
B) change to a negative slope. 
C) shift to the left. 
D) shift to the right. 
A) change to a positive slope. 
B) change to a negative slope. 
C) shift to the left. 
D) shift to the right.

Question 12

Direct controls have a clear advantage when a total ban is necessary.

Accepted Answer

A) True 
 B)False

Question 13

One of the conclusions of A.C.Pigou was that

Accepted Answer

A) a system of mandatory controls is the only effective means to control pollution. 
B) a system of charges can be an effective means to control pollution. 
C) pollution will wither away if a socialist system is in place. 
D) pollution cannot be adequately addressed in a price system. 
A) a system of mandatory controls is the only effective means to control pollution. 
B) a system of charges can be an effective means to control pollution. 
C) pollution will wither away if a socialist system is in place. 
D) pollution cannot be adequately addressed in a price system.

Question 14

Charging firms that emit pollutants is one way to deal with pollution.

Accepted Answer

A) True 
 B)False

Question 15

Who of the following has been prominently accused of acting on the basis of the "edifice complex?
"

Accepted Answer

A) the Environmental Protection Agency? 
B) A.C.Pigou 
C) the Army Corps of Engineers 
D) environmental activists 
A) the Environmental Protection Agency? 
B) A.C.Pigou 
C) the Army Corps of Engineers 
D) environmental activists

Question 16

When pollution problems arise from a sudden crisis, pollution taxes are a useful form of control.

Accepted Answer

A) True 
 B)False

Question 17

Describe how a pollution-control authority might use an emissions permits system to reduce pollution.

Accepted Answer

An authority could create a permit for a

Question 18

Centrally planned economies like China produce relatively little pollution.

Accepted Answer

A) True 
 B)False

Question 19

Supply and demand analysis

Accepted Answer

A) can be used to understand solutions to pollution, but not causes. 
B) can be used to analyze how externalities lead to environmental problems. 
C) cannot be used to analyze pollution, which is a physical and chemical problem. 
D) cannot be used to solve the pollution problem, but can be used to analyze it. 
A) can be used to understand solutions to pollution, but not causes. 
B) can be used to analyze how externalities lead to environmental problems. 
C) cannot be used to analyze pollution, which is a physical and chemical problem. 
D) cannot be used to solve the pollution problem, but can be used to analyze it.

Question 20

A "backstop resource" is a close substitute for a depletable resource that is available in almost unlimited supply but at a higher cost.Shale oil is a backstop resource for crude oil.Which of the following statements is correct?

Accepted Answer

A) The production of shale oil is likely to increase over time even if crude oil is still available. 
B) Shale oil is unlikely to be produced until all the crude oil has been depleted. 
C) The existence of shale oil as a backstop resource will discourage firms from seeking new reserves of crude oil. 
D) In the future, shale oil is likely to be produced at the same time as crude oil and to sell for a lower price. 
A) The production of shale oil is likely to increase over time even if crude oil is still available. 
B) Shale oil is unlikely to be produced until all the crude oil has been depleted. 
C) The existence of shale oil as a backstop resource will discourage firms from seeking new reserves of crude oil. 
D) In the future, shale oil is likely to be produced at the same time as crude oil and to sell for a lower price.

Exam 16: Externalities, the Environment, and Natural Resources

Pollution taxes are more efficient in cleaning up the environment than direct controls.What role is there for direct controls?

Regarding the causes of pollution, economists believe that:

How does the price system cope with depletable resources?

The supply curve of a natural resource like oil has a positive slope because

The worst and most difficult to extract resources are used first.

Rising prices help control the process of resource depletion by

Some of the newer pollutants that have appeared

Suppose that because of climatic conditions, the smog levels in Los Angeles suddenly soar to dangerous levels.The most successful policy in this case would be

What is new about environmental problems today is

Will depletable resources such as oil, coal, and aluminum be exhausted if their prices are left to the market?

If suppliers of garbage collection services charged the full costs of providing the service, the supply curve would

Direct controls have a clear advantage when a total ban is necessary.

One of the conclusions of A.C.Pigou was that

Charging firms that emit pollutants is one way to deal with pollution.

Who of the following has been prominently accused of acting on the basis of the "edifice complex? "

When pollution problems arise from a sudden crisis, pollution taxes are a useful form of control.

Describe how a pollution-control authority might use an emissions permits system to reduce pollution.

Centrally planned economies like China produce relatively little pollution.

Supply and demand analysis

A "backstop resource" is a close substitute for a depletable resource that is available in almost unlimited supply but at a higher cost.Shale oil is a backstop resource for crude oil.Which of the following statements is correct?

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Filters