Question 1

Increasing scarcity of a resource causes new supplies to become more and more costly.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

Price controls on resources generally lead to surpluses.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

There are two main advantages of a tax s

Question 6

Serious environmental problems are

Accepted Answer

A) unique to industrial economies. 
B) unique to Western economies. 
C) unique to civilized economies (i.e., those in which people live mainly in cities). 
D) None of the above is correct. 
A) unique to industrial economies. 
B) unique to Western economies. 
C) unique to civilized economies (i.e., those in which people live mainly in cities). 
D) None of the above is correct.

Question 7

If the price of garbage removal rises,people will

Accepted Answer

A) demand a lesser quantity of garbage removal. 
B) take more waste to recycling centers. 
C) repair broken items rather than throwing them out. 
D) All of the above are correct. 
A) demand a lesser quantity of garbage removal. 
B) take more waste to recycling centers. 
C) repair broken items rather than throwing them out. 
D) All of the above are correct.

Question 8

Empirical evidence indicates that imposing taxes on polluting emissions by firms

Accepted Answer

A) has no effect on the amount of pollution emitted. 
B) does not give the government leeway to regulate more dangerous emissions differently than less dangerous emissions. 
C) does reduce the amount of pollution emitted. 
D) discourages firms from investing in new methods of pollution abatement. 
A) has no effect on the amount of pollution emitted. 
B) does not give the government leeway to regulate more dangerous emissions differently than less dangerous emissions. 
C) does reduce the amount of pollution emitted. 
D) discourages firms from investing in new methods of pollution abatement.

Question 9

Economists believe that the goal of environmental policy should be zero pollution.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Externalities are benefits or damages conferred upon people who are directly involved in an exchange of a good or service.

Accepted Answer

A) True 
 B)False

Question 12

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 13

The socialist countries of Eastern Europe have

Accepted Answer

A) fewer environmental problems than capitalist countries. 
B) improved their environment more than the capitalist countries. 
C) worse environmental problems than capitalist countries. 
D) worsened since the collapse of communism there. 
A) fewer environmental problems than capitalist countries. 
B) improved their environment more than the capitalist countries. 
C) worse environmental problems than capitalist countries. 
D) worsened since the collapse of communism there.

Question 14

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 15

Taxes on polluting firms have

Accepted Answer

A) been tried, but not successfully. 
B) been successful in Germany in reducing water pollution. 
C) resulted in bankruptcy of the affected firms. 
D) never been tried to see if they work. 
A) been tried, but not successfully. 
B) been successful in Germany in reducing water pollution. 
C) resulted in bankruptcy of the affected firms. 
D) never been tried to see if they work.

Question 16

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

Accepted Answer

Critics of emissions trading fail to und

Question 17

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 18

"One of the failings of a market system is the damage to the environment.Pollution would not exist with a centrally planned economy." Evaluate this statement.

Accepted Answer

Market systems fail to include external

Question 19

Identify the economist who first addressed the environmental problem in terms of externalities.

Accepted Answer

A) Joseph Schumpeter 
B) Maynard Keynes 
C) A.C. Pigou 
D) J.B. Say 
A) Joseph Schumpeter 
B) Maynard Keynes 
C) A.C. Pigou 
D) J.B. Say

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 17: Externalities, the Environment, and Natural Resources

Increasing scarcity of a resource causes new supplies to become more and more costly.

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

Direct controls on polluting activity

Price controls on resources generally lead to surpluses.

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

Serious environmental problems are

If the price of garbage removal rises,people will

Empirical evidence indicates that imposing taxes on polluting emissions by firms

Economists believe that the goal of environmental policy should be zero pollution.

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

Externalities are benefits or damages conferred upon people who are directly involved in an exchange of a good or service.

Individuals play ____ in causing pollution.

The socialist countries of Eastern Europe have

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

Taxes on polluting firms have

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

Some of the newer pollutants that have appeared

"One of the failings of a market system is the damage to the environment.Pollution would not exist with a centrally planned economy." Evaluate this statement.

Identify the economist who first addressed the environmental problem in terms of externalities.

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

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 I: the Price System

The Shortcomings of Free Markets

The Markets Prime Achievement: Innovation and Growth

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

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