Question 1

The Following Questions Refer to the graph below.  
-A tax of T1 per unit on polluted discharge will induce the firm to

Accepted Answer

A) Clean its discharge up to q1 units per day rather than pay the tax 
B) Pay the tax rather than clean discharge up to q1 units per day 
C) Clean its discharge exceeding q1 units per day rather than pay the tax 
D) Pay the tax on all units 
E) (a)and (d) 
A) Clean its discharge up to q1 units per day rather than pay the tax 
B) Pay the tax rather than clean discharge up to q1 units per day 
C) Clean its discharge exceeding q1 units per day rather than pay the tax 
D) Pay the tax on all units 
E) (a)and (d)

Question 2

Which of the following is a service provided by the environment?

Accepted Answer

A) Use as a habitat 
B) Provision of amenities 
C) Provision of raw materials 
D) Waste disposal 
E) All of the above 
A) Use as a habitat 
B) Provision of amenities 
C) Provision of raw materials 
D) Waste disposal 
E) All of the above

Question 3

Implicit costs are opportunity costs.

Accepted Answer

A) True 
 B)False

Question 4

Pollution rights markets

Accepted Answer

A) Have been shown to work in theory,but not in practice 
B) Have never been used in the real world 
C) Are used around the world,but not in the United States 
D) Have been used to reduce sulfur dioxide emissions 
E) Have not been effective in controlling sulfur dioxide emissions 
A) Have been shown to work in theory,but not in practice 
B) Have never been used in the real world 
C) Are used around the world,but not in the United States 
D) Have been used to reduce sulfur dioxide emissions 
E) Have not been effective in controlling sulfur dioxide emissions

Question 5

Pollution occurs when the environment cannot recycle all the waste dumped into it.

Accepted Answer

A) True 
 B)False

Question 6

Marginal private cost (MPC)always includes:

Accepted Answer

A) The price of a good in the market 
B) The extra costs of production of one more unit of a good 
C) The additional benefits received by consumers from the consumption of the good 
D) The costs imposed on society from pollution 
E) The expenditures by government to control negative externalities 
A) The price of a good in the market 
B) The extra costs of production of one more unit of a good 
C) The additional benefits received by consumers from the consumption of the good 
D) The costs imposed on society from pollution 
E) The expenditures by government to control negative externalities

Question 7

The establishment of property rights to the environment would not,on its own,lead to the optimal level of pollution control.

Accepted Answer

A) True 
 B)False

Question 8

When the cost of an action falls on other than the person (or persons)responsible for the action,which of the following exists?

Accepted Answer

A) Positive externality 
B) Negative externality 
C) Externality in consumption 
D) Externality in production 
E) External cost 
A) Positive externality 
B) Negative externality 
C) Externality in consumption 
D) Externality in production 
E) External cost

Question 9

The Following Questions Refer to the graph below.  
-Assume that the current market demand and supply curves for Z are D2 and S2.If there are negative social spillovers associated with the production of Z,

Accepted Answer

A) Government should levy a per unit tax on Z to shift the supply curve toward S1 
B) An output greater than 0G would improve resource allocation 
C) Government should levy a per unit tax on Z to shift the demand curve toward D1 
D) An output smaller than 0G would improve resource allocation 
E) Both (a)and (d) 
A) Government should levy a per unit tax on Z to shift the supply curve toward S1 
B) An output greater than 0G would improve resource allocation 
C) Government should levy a per unit tax on Z to shift the demand curve toward D1 
D) An output smaller than 0G would improve resource allocation 
E) Both (a)and (d)

Question 10

Which of the following is a factor leading to pollution?

Accepted Answer

A) People are inherently dirty 
B) There are property rights to the environment 
C) The environment is collectively consumed 
D) The law of increasing returns 
E) All of the above 
A) People are inherently dirty 
B) There are property rights to the environment 
C) The environment is collectively consumed 
D) The law of increasing returns 
E) All of the above

Question 11

The Following Questions Refer to the graph below.  
-Which curve is the firm's MPB curve?

Accepted Answer

A) D 
B) S 
C) X1 
D) X2 
E) None of the above 
A) D 
B) S 
C) X1 
D) X2 
E) None of the above

Question 12

The level of dissolved oxygen is an important measure of water quality.

Accepted Answer

A) True 
 B)False

Question 13

The Following Questions Refer to the graph below.  
-A tax of M0 per unit on polluted discharge will induce the firm to clean up

Accepted Answer

A) Q1 
B) More than q1 
C) Q 
D) More than q but less than q1 
E) Zero 
A) Q1 
B) More than q1 
C) Q 
D) More than q but less than q1 
E) Zero

Question 14

In the case of an upstream paper mill that pollutes water used by a downstream power plant forcing the latter to clean the water it uses,the costs of pollution by the paper industry are borne by both the consumers and producers of electricity.

Accepted Answer

A) True 
 B)False

Question 15

Direct controls,such as setting emission standards for automobiles,will achieve a pollution free environment.

Accepted Answer

A) True 
 B)False

Question 16

When a benefit of an action falls on other than the person (or persons)responsible for the action,which of the following exists?

Accepted Answer

A) Positive externality 
B) Negative externality 
C) Externality in consumption 
D) Externality in production 
E) External cost 
A) Positive externality 
B) Negative externality 
C) Externality in consumption 
D) Externality in production 
E) External cost

Question 17

The Following Questions Refer to the graph below.  
-The value of well-being lost due to under-production of the water-using firm's product is equal to area

Accepted Answer

A) acd 
B) abd 
C) bed 
D) deg 
E) dgf 
A) acd 
B) abd 
C) bed 
D) deg 
E) dgf

Question 18

Human production processes do not include which of the following services?

Accepted Answer

A) Mineral deposits,such as coal and iron 
B) Renewable resources,like timber and plant products 
C) Technological advances in production 
D) Recycling of waste materials,such as chemical wastes 
E) All of the above 
A) Mineral deposits,such as coal and iron 
B) Renewable resources,like timber and plant products 
C) Technological advances in production 
D) Recycling of waste materials,such as chemical wastes 
E) All of the above

Question 19

The Following Questions Refer to the graph below.  
-If "Z" is pollution control,which of the following shifts illustrates the effect on the market for pollution control if new technology to control pollution is developed?

Accepted Answer

A) D1 to D2 
B) D2 to D1 
C) S1 to S2 
D) S2 to S1 
E) None of the above 
A) D1 to D2 
B) D2 to D1 
C) S1 to S2 
D) S2 to S1 
E) None of the above

Question 20

Following Questions are based on the following information.
In a small city located on a lake,the raw sewage of the city is dumped directly into the lakE.This has been a source of distress for citizens who like to swim,fish,and water ski.A study has been instituted to determine what value the citizens place on pollution control,and the results are listed in the following tablE.Costs of pollution control are also listed.
  
-The marginal social cost of the fourth unit of pollution control is

Accepted Answer

A) Zero 
B) $30,000 
C) $90,000 
D) $100,000 
E) $120,000 
A) Zero 
B) $30,000 
C) $90,000 
D) $100,000 
E) $120,000

The Following Questions Refer to the graph below. -A tax of T₁ per unit on polluted discharge will induce the firm to

Which of the following is a service provided by the environment?

Implicit costs are opportunity costs.

Pollution rights markets

Pollution occurs when the environment cannot recycle all the waste dumped into it.

Marginal private cost (MPC)always includes:

The establishment of property rights to the environment would not,on its own,lead to the optimal level of pollution control.

When the cost of an action falls on other than the person (or persons)responsible for the action,which of the following exists?

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D₂ and S₂.If there are negative social spillovers associated with the production of Z,

Which of the following is a factor leading to pollution?

The Following Questions Refer to the graph below. -Which curve is the firm's MPB curve?

The level of dissolved oxygen is an important measure of water quality.

The Following Questions Refer to the graph below. -A tax of M₀ per unit on polluted discharge will induce the firm to clean up

In the case of an upstream paper mill that pollutes water used by a downstream power plant forcing the latter to clean the water it uses,the costs of pollution by the paper industry are borne by both the consumers and producers of electricity.

Direct controls,such as setting emission standards for automobiles,will achieve a pollution free environment.

When a benefit of an action falls on other than the person (or persons)responsible for the action,which of the following exists?

The Following Questions Refer to the graph below. -The value of well-being lost due to under-production of the water-using firm's product is equal to area

Human production processes do not include which of the following services?

The Following Questions Refer to the graph below. -If "Z" is pollution control,which of the following shifts illustrates the effect on the market for pollution control if new technology to control pollution is developed?

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Monopoly Power: Can Markets Be Controlled

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters

Exam 4: Pollution Problems: Must We Foul Our Own Nests

The Following Questions Refer to the graph below. -A tax of T1 per unit on polluted discharge will induce the firm to

Which of the following is a service provided by the environment?

Implicit costs are opportunity costs.

Pollution rights markets

Pollution occurs when the environment cannot recycle all the waste dumped into it.

Marginal private cost (MPC)always includes:

The establishment of property rights to the environment would not,on its own,lead to the optimal level of pollution control.

When the cost of an action falls on other than the person (or persons)responsible for the action,which of the following exists?

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D2 and S2.If there are negative social spillovers associated with the production of Z,

Which of the following is a factor leading to pollution?

The Following Questions Refer to the graph below. -Which curve is the firm's MPB curve?

The level of dissolved oxygen is an important measure of water quality.

The Following Questions Refer to the graph below. -A tax of M0 per unit on polluted discharge will induce the firm to clean up

In the case of an upstream paper mill that pollutes water used by a downstream power plant forcing the latter to clean the water it uses,the costs of pollution by the paper industry are borne by both the consumers and producers of electricity.

Direct controls,such as setting emission standards for automobiles,will achieve a pollution free environment.

When a benefit of an action falls on other than the person (or persons)responsible for the action,which of the following exists?

The Following Questions Refer to the graph below. -The value of well-being lost due to under-production of the water-using firm's product is equal to area

Human production processes do not include which of the following services?

The Following Questions Refer to the graph below. -If "Z" is pollution control,which of the following shifts illustrates the effect on the market for pollution control if new technology to control pollution is developed?

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Monopoly Power: Can Markets Be Controlled

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters

The Following Questions Refer to the graph below. -A tax of T₁ per unit on polluted discharge will induce the firm to

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D₂ and S₂.If there are negative social spillovers associated with the production of Z,

The Following Questions Refer to the graph below. -A tax of M₀ per unit on polluted discharge will induce the firm to clean up