Exam 16: Externalities, the Environment, and Natural Resources

The legal system imposes large financial penalties on firms caught violating Environmental Protection Agency guidelines.The EPA's standards program is thus an example of a

Environmentalists, politicians, and economists have different perspectives on what constitutes appropriate environmental policy.Which of the following statements was probably made by an economist?

What are the advantages of a tax system for pollution control?

John Maynard Keynes was the author of the book, The Economics of Welfare, which first addressed environmental problems in terms of externalities.​

A pollution tax penalizes inefficient firms.

How do rising prices slow resource depletion?

Economic theory posits that a resource which is finite and being depleted will rise in price continuously, and demand will be reduced.In fact, a recent study, graphing the price behavior of lead, zinc and copper found that until about 2007,

One advantage about an emissions permit system is that

The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth and which protects humans from ultraviolet radiation.Output of this substance has been restricted by a licensing system where producers have to bid in the open market for licenses to produce them in specified quantities.This is an example of dealing with externalities by

The socialist countries of Eastern Europe have

Externalities are commonly generated from

Emissions permits might be called a "license to pollute."

Voluntarism often has proved to be weak and unreliable.Does it still have a place in controlling activities that damage the environment?

If not recycled, an input used in production ultimately winds up as a waste product.

Explain some important situations where direct controls have a clear advantage over taxes.

To protect the environment, governments in the United States have mainly used

One of the reasons that pollution problems are as large as they are is that

Between 1980 and 2008 recycling in the United States has

Price controls would ordinarily be used to increase rather than decrease prices of depletable resources.

Economists generally prefer to deal with emissions of pollutants