Question 1

Explain what a "cap and trade" program is and how it works.Does the U.S.have a cap and trade program?
 If so, is it successful?

Accepted Answer

In a "cap and trade" program, the EPA se

Question 2

Individuals play ____ in causing pollution.

Accepted Answer

A) almost no role 
B) a large but decreasing role 
C) a major role 
D) a reconstructive role 
A) almost no role 
B) a large but decreasing role 
C) a major role 
D) a reconstructive role

Question 3

A firm producing a smoke externality is producing

Accepted Answer

A) more than the socially optimal quantity of output. 
B) less than the socially optimal quantity of output. 
C) exactly the socially optimal quantity of output. 
D) There is insufficient information to answer. 
A) more than the socially optimal quantity of output. 
B) less than the socially optimal quantity of output. 
C) exactly the socially optimal quantity of output. 
D) There is insufficient information to answer.

Question 4

Environmental destruction is peculiar to centrally planned economies.

Accepted Answer

A) True 
 B)False

Question 5

In practice, taxes on emissions of pollutants have been found to

Accepted Answer

A) be ineffective in encouraging firms to pollute less. 
B) significantly reduce pollution by taxed firms. 
C) be less reliable in reducing pollution than direct controls on pollution. 
D) cause failures of the pricing system. 
A) be ineffective in encouraging firms to pollute less. 
B) significantly reduce pollution by taxed firms. 
C) be less reliable in reducing pollution than direct controls on pollution. 
D) cause failures of the pricing system.

Question 6

By the year 2100, global warming may lead to

Accepted Answer

A) shifts in world rain patterns. 
B) disruption of agriculture. 
C) expanded deserts. 
D) coastal inundation. 
E) all of the above 
A) shifts in world rain patterns. 
B) disruption of agriculture. 
C) expanded deserts. 
D) coastal inundation. 
E) all of the above

Question 7

The position of the supply curve in the market for garbage removal

Accepted Answer

A) is irrelevant since the cost is fixed. 
B) depends on the marginal cost of garbage removal. 
C) depends on the demand for garbage removal services. 
D) is unaffected by taxes levied per household amount of garbage. 
A) is irrelevant since the cost is fixed. 
B) depends on the marginal cost of garbage removal. 
C) depends on the demand for garbage removal services. 
D) is unaffected by taxes levied per household amount of garbage.

Question 8

Under an emissions tax program, the government sets ____; under an emissions permits program, the government sets ____.

Accepted Answer

A) the price of the right to pollute; the price of the right to pollute 
B) the price of the right to pollute; the permitted total quantity of pollution 
C) the permitted total quantity of pollution; the price of the right to pollute 
D) the permitted total quantity of pollution; the permitted total quantity of pollution 
A) the price of the right to pollute; the price of the right to pollute 
B) the price of the right to pollute; the permitted total quantity of pollution 
C) the permitted total quantity of pollution; the price of the right to pollute 
D) the permitted total quantity of pollution; the permitted total quantity of pollution

Question 9

The deregulation of oil pricing will

Accepted Answer

A) increase our dependence on foreign oil. 
B) make the United States energy-independent by the year 2000. 
C) decrease domestic production. 
D) decrease the extent of the nation's dependence on foreign oil. 
A) increase our dependence on foreign oil. 
B) make the United States energy-independent by the year 2000. 
C) decrease domestic production. 
D) decrease the extent of the nation's dependence on foreign oil.

Question 10

Taxing pollution will encourage firms to reduce pollutants dumped in the atmosphere or in streams.

Accepted Answer

A) True 
 B)False

Question 11

Basic supply and demand analysis can be used to explain how externalities lead to environmental problems.

Accepted Answer

A) True 
 B)False

Question 12

At the interest rate r, the price of a depletable natural resource three years from the present (price in present = P) will be, everything else being equal, which of the following?

Accepted Answer

A) 3P 
B) P₃ 
C) P(1 + r)3 
D) 3P(1 + r)3 
A) 3P 
B) P₃ 
C) P(1 + r)3 
D) 3P(1 + r)3

Question 13

Dwindling resources encourage the development of substitute products.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following observations is true?

Accepted Answer

A) Environmental damage can be reduced to zero. 
B) Pollution results from a price mechanism malfunction. 
C) Charging those who emit pollution is not a way of dealing with pollution problems. 
D) Public interest requires pollution be maintained at its free-market level. 
A) Environmental damage can be reduced to zero. 
B) Pollution results from a price mechanism malfunction. 
C) Charging those who emit pollution is not a way of dealing with pollution problems. 
D) Public interest requires pollution be maintained at its free-market level.

Question 15

There is concern that CFCs, a chemical by-product of refrigeration, are destroying Earth's protective ozone layer, leaving us more vulnerable to cataracts and skin cancer.Suppose each air conditioner creates 10 pounds of CFCs.The demand and supply of air conditioners follow:What will be the free market price and quantity, and what will be the price and quantity if the government forces suppliers to pay a $100 tax for each air conditioner produced?

Accepted Answer

The free market equilibrium occurs at Q

Question 16

The price of a depletable natural resource last year rose more than expected.The most likely explanation is that

Accepted Answer

A) interest rates fell. 
B) an unexpected discovery of reserves was made. 
C) the major suppliers formed a cartel. 
D) price ceilings were established. 
A) interest rates fell. 
B) an unexpected discovery of reserves was made. 
C) the major suppliers formed a cartel. 
D) price ceilings were established.

Question 17

Direct controls on polluting activity

Accepted Answer

A) have never been tried as an instrument of environmental policy. 
B) have been the chief instrument of environmental policy. 
C) have been rejected as a tool of environmental policy. 
D) are the tool of future environmental policy, based on 1993 legislation. 
A) have never been tried as an instrument of environmental policy. 
B) have been the chief instrument of environmental policy. 
C) have been rejected as a tool of environmental policy. 
D) are the tool of future environmental policy, based on 1993 legislation.

Question 18

Unexpected discoveries of mineral reserves will ordinarily cause the price of these minerals to increase.

Accepted Answer

A) True 
 B)False

Question 19

Many economists argue that the most efficient way to control pollution is to

Accepted Answer

A) ban all activities that create pollution. 
B) enforce legal standards on air and water quality. 
C) promote environmental awareness among citizens. 
D) impose taxes on emissions. 
A) ban all activities that create pollution. 
B) enforce legal standards on air and water quality. 
C) promote environmental awareness among citizens. 
D) impose taxes on emissions.

Question 20

Forecasts of an inevitable exhaustion of essential natural resources are "simply beside the point" because higher prices

Accepted Answer

A) reduce quantity demanded. 
B) stimulate supply. 
C) stimulate alternative technology. 
D) All of the above are true. 
A) reduce quantity demanded. 
B) stimulate supply. 
C) stimulate alternative technology. 
D) All of the above are true.

Exam 16: Externalities, the Environment, and Natural Resources

Explain what a "cap and trade" program is and how it works.Does the U.S.have a cap and trade program? If so, is it successful?

Individuals play ____ in causing pollution.

A firm producing a smoke externality is producing

Environmental destruction is peculiar to centrally planned economies.

In practice, taxes on emissions of pollutants have been found to

By the year 2100, global warming may lead to

The position of the supply curve in the market for garbage removal

Under an emissions tax program, the government sets ____; under an emissions permits program, the government sets ____.

The deregulation of oil pricing will

Taxing pollution will encourage firms to reduce pollutants dumped in the atmosphere or in streams.

Basic supply and demand analysis can be used to explain how externalities lead to environmental problems.

At the interest rate r, the price of a depletable natural resource three years from the present (price in present = P) will be, everything else being equal, which of the following?

Dwindling resources encourage the development of substitute products.

Which of the following observations is true?

The price of a depletable natural resource last year rose more than expected.The most likely explanation is that

Direct controls on polluting activity

Unexpected discoveries of mineral reserves will ordinarily cause the price of these minerals to increase.

Many economists argue that the most efficient way to control pollution is to

Forecasts of an inevitable exhaustion of essential natural resources are "simply beside the point" because higher prices

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

Under an emissions tax program, the government sets ; under an emissions permits program, the government sets .