Question 1

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 2

Which basic approach to environment policy may be the only workable solution in brief but serious emergencies that do not allow for time to plan and enact a systematic program?

Accepted Answer

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

Question 3

Environmental problems occur exclusively in capitalist economies.

Accepted Answer

A) True 
 B)False

Question 4

Externalities can cause the market mechanism to

Accepted Answer

A) malfunction. 
B) improve. 
C) operate efficiently. 
D) move up toward the production possibility curve. 
A) malfunction. 
B) improve. 
C) operate efficiently. 
D) move up toward the production possibility curve.

Question 5

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 6

An unexpected discovery of a new mineral deposit will cause the

Accepted Answer

A) demand curve to shift outward. 
B) demand curve to shift inward. 
C) supply curve to shift outward. 
D) supply curve to shift inward. 
A) demand curve to shift outward. 
B) demand curve to shift inward. 
C) supply curve to shift outward. 
D) supply curve to shift inward.

Question 7

The invention of new mining methods will affect price through the supply side.

Accepted Answer

A) True 
 B)False

Question 8

A pollution tax penalizes inefficient firms.

Accepted Answer

A) True 
 B)False

Question 9

The external costs of cigarettes are related to the health problem smoking produces for both smokers and nonsmokers.One estimate places these costs at 29 cents per pack.Presently,sales and excise taxes on cigarettes average about 37 cents per pack.These estimates suggest that (i)cigarette consumption is below the optimal or efficient quantity; (ii)cigarette taxes should be reduced.

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 10

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 11

Recycling in the United States in recent years

Accepted Answer

A) has decreased in spite of increased fees for dumping trash. 
B) has remained unchanged, and increased fees for dumping may help. 
C) has increased with increased fees for dumping trash. 
D) has increased with no help from increased fees for dumping trash. 
A) has decreased in spite of increased fees for dumping trash. 
B) has remained unchanged, and increased fees for dumping may help. 
C) has increased with increased fees for dumping trash. 
D) has increased with no help from increased fees for dumping trash.

Question 12

Externalities can create a threat to environmental quality.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Interest in environmental problems has intensified,perhaps because

Accepted Answer

A) for the first time in history in the 1970s people began to die from pollution-related diseases. 
B) rising incomes have caused people to be more concerned with the quality of their lives. 
C) the centrally planned economies are polluted. 
D) All of the above are true. 
A) for the first time in history in the 1970s people began to die from pollution-related diseases. 
B) rising incomes have caused people to be more concerned with the quality of their lives. 
C) the centrally planned economies are polluted. 
D) All of the above are true.

Question 15

Taxes on polluting emissions are

Accepted Answer

A) more efficient than direct controls. 
B) used by all economic societies. 
C) less effective than direct regulations. 
D) easily enforced through the criminal justice system. 
A) more efficient than direct controls. 
B) used by all economic societies. 
C) less effective than direct regulations. 
D) easily enforced through the criminal justice system.

Question 16

The reason why cleanup costs are lower for a taxes approach than for a direct controls approach is that

Accepted Answer

A) all firms reduce pollution equally and fairly. 
B) firms that are able to clean up at lowest cost do so; others don't. 
C) large polluters clean up the most, which is always lowest cost. 
D) small polluters clean up the most, which is generally the cheapest. 
A) all firms reduce pollution equally and fairly. 
B) firms that are able to clean up at lowest cost do so; others don't. 
C) large polluters clean up the most, which is always lowest cost. 
D) small polluters clean up the most, which is generally the cheapest.

Question 17

The major problem with direct controls as an environmental protection measure has been

Accepted Answer

A) inept administrators. 
B) corrupt judges. 
C) illegal dumping. 
D) legislation with no teeth. 
A) inept administrators. 
B) corrupt judges. 
C) illegal dumping. 
D) legislation with no teeth.

Question 18

Economists use a resource's price as an indicator of its relative scarcity.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) "We take the position that there are rights involved here, rights to be protected from threats to your health, regardless of the costs involved." 
B) "Protecting the environment is so important that standards cannot be too high, and continuing improvements must be made regardless of cost." 
C) "Pollution is a moral issue that cannot be reduced to dollars and cents." 
D) "Clean air and water are things we can buy-if the price is right." 
A) "We take the position that there are rights involved here, rights to be protected from threats to your health, regardless of the costs involved." 
B) "Protecting the environment is so important that standards cannot be too high, and continuing improvements must be made regardless of cost." 
C) "Pollution is a moral issue that cannot be reduced to dollars and cents." 
D) "Clean air and water are things we can buy-if the price is right."

Question 20

One of the virtues of rising resource prices is they encourage innovation,especially the discovery of other more abundant resources.

Accepted Answer

A) True 
 B)False

Exam 17: Externalities, the Environment, and Natural Resources

The deregulation of oil pricing will

Which basic approach to environment policy may be the only workable solution in brief but serious emergencies that do not allow for time to plan and enact a systematic program?

Environmental problems occur exclusively in capitalist economies.

Externalities can cause the market mechanism to

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

An unexpected discovery of a new mineral deposit will cause the

The invention of new mining methods will affect price through the supply side.

A pollution tax penalizes inefficient firms.

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?

Recycling in the United States in recent years

Externalities can create a threat to environmental quality.

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

Interest in environmental problems has intensified,perhaps because

Taxes on polluting emissions are

The reason why cleanup costs are lower for a taxes approach than for a direct controls approach is that

The major problem with direct controls as an environmental protection measure has been

Economists use a resource's price as an indicator of its relative scarcity.

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

One of the virtues of rising resource prices is they encourage innovation,especially the discovery of other more abundant 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

Filters