Question 1

The "greenhouse effect" is predicted to

Accepted Answer

A) lead to the next ice age. 
B) raise global temperature. 
C) pollute the oceans. 
D) break the edifice complex by the turn of the century. 
A) lead to the next ice age. 
B) raise global temperature. 
C) pollute the oceans. 
D) break the edifice complex by the turn of the century.

Question 2

What has happened to resource prices in the twentieth century and what do they reveal about resource scarcity?

Accepted Answer

Figure 17-3 from the textbook provides d

Question 3

Direct controls are considered inefficient because all firms are forced to pay the same costs.

Accepted Answer

A) True 
 B)False

Question 4

Why is it misleading to argue that emissions permits are a "license to pollute"?

Accepted Answer

Critics of emissions trading fail to und

Question 5

Which of the following has also been called the command and control approach?

Accepted Answer

A) Direct controls 
B) Voluntary compliance 
C) Tradable emissions permits 
D) Taxes on pollution 
A) Direct controls 
B) Voluntary compliance 
C) Tradable emissions permits 
D) Taxes on pollution

Question 6

Economists predicted that the price of a depletable natural resource would rise by about 15 percent.Actually the price fell 10 percent.What most likely happened?

Accepted Answer

A) A government subsidy was removed. 
B) Extraction costs increased. 
C) Price controls were suspended. 
D) An unexpected discovery of reserves was made. 
A) A government subsidy was removed. 
B) Extraction costs increased. 
C) Price controls were suspended. 
D) An unexpected discovery of reserves was made.

Question 7

Many states charge a 10-cent deposit on every can of soda sold.A purchaser pays an extra 10 cents per can and will get his money back by returning the empty can to a store.This policy encourages recycling by

Accepted Answer

A) increasing the supply of recyclable materials. 
B) shifting in the demand curve for canned soda. 
C) raising the opportunity cost of discarding empty cans. 
D) taxing the production of canned soda. 
A) increasing the supply of recyclable materials. 
B) shifting in the demand curve for canned soda. 
C) raising the opportunity cost of discarding empty cans. 
D) taxing the production of canned soda.

Question 8

In retaliation for U.S.support for Israel during the Arab-Israeli War, OPEC countries stopped selling oil to the United States.For the United States, this embargo caused the

Accepted Answer

A) demand curve for oil to shift out. 
B) demand curve for oil to shift in. 
C) supply curve of oil to shift out. 
D) supply curve of oil to shift in. 
A) demand curve for oil to shift out. 
B) demand curve for oil to shift in. 
C) supply curve of oil to shift out. 
D) supply curve of oil to shift in.

Question 9

One advantage of emissions permits is that they allow the government to choose the level of pollution reduction.

Accepted Answer

A) True 
 B)False

Question 10

Taxes on polluting firms for pollution are intended to

Accepted Answer

A) raise enough revenue to cut the deficit in half. 
B) encourage firms to reduce charges by polluting less. 
C) be efficient, i.e., result in no excess burden. 
D) raise revenue for general spending needs. 
A) raise enough revenue to cut the deficit in half. 
B) encourage firms to reduce charges by polluting less. 
C) be efficient, i.e., result in no excess burden. 
D) raise revenue for general spending needs.

Question 11

Compare market price and quantity of steel to socially optimal price and quantity if steel producers ignore soot emitted from their smokestacks.Use a graph to assist your explanation.

Accepted Answer

The market results in too low a price an

Question 12

Explain why environmental damage would be classified as an externality.

Accepted Answer

An externality is an incidental conseque

Question 13

When pollution emissions can be measured taxation will tend to be more effective than any other method of controlling pollution.

Accepted Answer

A) True 
 B)False

Question 14

Major contributors to pollution are

Accepted Answer

A) individuals. 
B) firms. 
C) government. 
D) All of the above are correct. 
A) individuals. 
B) firms. 
C) government. 
D) All of the above are correct.

Question 15

Pollution is a relatively new phenomenon.

Accepted Answer

A) True 
 B)False

Question 16

Increasing GDP generally causes increases in problems of waste disposal.

Accepted Answer

A) True 
 B)False

Question 17

Global warming of the past century, and especially in the past decade, is at least partly a consequence of human activities that have increased ____ in the atmosphere.

Accepted Answer

A) smog 
B) PCBs 
C) ozone 
D) "greenhouse gases" 
A) smog 
B) PCBs 
C) ozone 
D) "greenhouse gases"

Question 18

The effectiveness of direct controls on pollution depends on: (i) the budgets and enthusiasm of the regulatory bodies; (ii) sufficiently strong statutory penalties.

Accepted Answer

A) i and ii 
B) i but not ii 
C) ii but not i 
D) neither i nor ii 
A) i and ii 
B) i but not ii 
C) ii but not i 
D) neither i nor ii

Question 19

Increased concern about environmental problems derive partly from

Accepted Answer

A) concerns about increasing economic output. 
B) concerns about unemployment and inflation. 
C) new awareness that the problems exist. 
D) concerns about the quality of life. 
A) concerns about increasing economic output. 
B) concerns about unemployment and inflation. 
C) new awareness that the problems exist. 
D) concerns about the quality of life.

Question 20

By providing free garbage removal, a community

Accepted Answer

A) discourages activities that produce detrimental externalities. 
B) encourages citizens to recycle items rather than throw them out. 
C) leads citizens to throw out more garbage than is socially optimal. 
D) None of the above is correct. 
A) discourages activities that produce detrimental externalities. 
B) encourages citizens to recycle items rather than throw them out. 
C) leads citizens to throw out more garbage than is socially optimal. 
D) None of the above is correct.

Exam 16: Externalities, the Environment, and Natural Resources

The "greenhouse effect" is predicted to

What has happened to resource prices in the twentieth century and what do they reveal about resource scarcity?

Direct controls are considered inefficient because all firms are forced to pay the same costs.

Why is it misleading to argue that emissions permits are a "license to pollute"?

Which of the following has also been called the command and control approach?

Economists predicted that the price of a depletable natural resource would rise by about 15 percent.Actually the price fell 10 percent.What most likely happened?

Many states charge a 10-cent deposit on every can of soda sold.A purchaser pays an extra 10 cents per can and will get his money back by returning the empty can to a store.This policy encourages recycling by

In retaliation for U.S.support for Israel during the Arab-Israeli War, OPEC countries stopped selling oil to the United States.For the United States, this embargo caused the

One advantage of emissions permits is that they allow the government to choose the level of pollution reduction.

Taxes on polluting firms for pollution are intended to

Compare market price and quantity of steel to socially optimal price and quantity if steel producers ignore soot emitted from their smokestacks.Use a graph to assist your explanation.

Explain why environmental damage would be classified as an externality.

When pollution emissions can be measured taxation will tend to be more effective than any other method of controlling pollution.

Major contributors to pollution are

Pollution is a relatively new phenomenon.

Increasing GDP generally causes increases in problems of waste disposal.

Global warming of the past century, and especially in the past decade, is at least partly a consequence of human activities that have increased ____ in the atmosphere.

The effectiveness of direct controls on pollution depends on: (i) the budgets and enthusiasm of the regulatory bodies; (ii) sufficiently strong statutory penalties.

Increased concern about environmental problems derive partly from

By providing free garbage removal, a community

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

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