Question 1

The efficient level of pollution is zero only if the

Accepted Answer

A) Marginal cost of pollution control is zero 
B) Marginal benefit of pollution control is zero 
C) MPB of pollution control equals MSB 
D) MPC of pollution control equals MSC 
E) MPC of pollution control equals MPB 
A) Marginal cost of pollution control is zero 
B) Marginal benefit of pollution control is zero 
C) MPB of pollution control equals MSB 
D) MPC of pollution control equals MSC 
E) MPC of pollution control equals MPB

Question 2

If a pollution tax is placed on a firm emitting pollution,the firm will treat pollution,rather than pay the tax,as long as the tax is

Accepted Answer

A) Above its MPC of pollution control 
B) Below its MPC of pollution control 
C) Above the MSC of pollution control 
D) Below the MSC of pollution control 
E) Reasonable 
A) Above its MPC of pollution control 
B) Below its MPC of pollution control 
C) Above the MSC of pollution control 
D) Below the MSC of pollution control 
E) Reasonable

Question 3

The level of pollution increases when

Accepted Answer

A) A person breathes 
B) Wastes are dumped into the environment 
C) Wastes are dumped into the environment at a higher rate than wastes are recycled 
D) New industrial plant opens 
E) Recycling increases 
A) A person breathes 
B) Wastes are dumped into the environment 
C) Wastes are dumped into the environment at a higher rate than wastes are recycled 
D) New industrial plant opens 
E) Recycling increases

Question 4

Costs incurred by the producer to buy or hire resources are called

Accepted Answer

A) Implicit costs 
B) Explicit costs 
C) Opportunity costs 
D) Total costs 
E) Marginal costs 
A) Implicit costs 
B) Explicit costs 
C) Opportunity costs 
D) Total costs 
E) Marginal costs

Question 5

The Following Questions Refer to the graph below.  
-Assume that the current market demand and supply curves for Z are D1 and S1 and there are positive social spillovers associated with the consumption of Z.Which curve could represent the MSB curve for Z?

Accepted Answer

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

Question 6

When pollution is not regulated in the market,polluting firms will

Accepted Answer

A) Under-utilize resources and charge high prices 
B) Under-utilize resources and charge low prices 
C) Use the appropriate level of resources,but charge high prices 
D) Be very profitable 
E) Over-utilize resources and charge low prices 
A) Under-utilize resources and charge high prices 
B) Under-utilize resources and charge low prices 
C) Use the appropriate level of resources,but charge high prices 
D) Be very profitable 
E) Over-utilize resources and charge low prices

Question 7

If all benefits from consuming a good go to consumers,the demand curve is the same as the

Accepted Answer

A) MPC curve 
B) MSC curve 
C) MPB curve 
D) Supply curve 
E) Benefit curve 
A) MPC curve 
B) MSC curve 
C) MPB curve 
D) Supply curve 
E) Benefit curve

Question 8

The costs of pollution control to a society are measured by the value of the goods and services that must be given up to have the control.

Accepted Answer

A) True 
 B)False

Question 9

Pollution is an example of a negative externality in consumption.

Accepted Answer

A) True 
 B)False

Question 10

Complete elimination of pollution would only make economic sense if the cost to eliminate the last unit of pollution is less than the benefit from its elimination.

Accepted Answer

A) True 
 B)False

Question 11

If the marginal social cost of attaining a certain level of water purity exceeds the marginal social benefit,the level of water purity should be decreaseD.

Accepted Answer

A) True 
 B)False

Question 12

The establishment of clearly defined property rights to the environment would lead to an elimination of pollution.

Accepted Answer

A) True 
 B)False

Question 13

Pollution is generated because firms use inefficient production processes.

Accepted Answer

A) True 
 B)False

Question 14

The Following Questions Refer to the graph below.  
-What is the efficient quantity of the polluting firm's product?

Accepted Answer

A) Q1 
B) Q2 
C) Q3 
D) 0 
E) It cannot be determined 
A) Q1 
B) Q2 
C) Q3 
D) 0 
E) It cannot be determined

Question 15

Pollution consists of loading the environment with wastes that are not completely recycled,are not recycled fast enough,or are not recycled at all.

Accepted Answer

A) True 
 B)False

Question 16

The Following Questions Refer to the graph below.  
-Suppose the current tax is T1 and the government wishes to allow less pollution.It should

Accepted Answer

A) Raise the tax above T1 
B) Lower the tax below T1 
C) Shift the MPC curve to the left 
D) Shift the MPC curve to the right 
E) Do none of the above 
A) Raise the tax above T1 
B) Lower the tax below T1 
C) Shift the MPC curve to the left 
D) Shift the MPC curve to the right 
E) Do none of the above

Question 17

For a tax on pollution to be effective,it must be

Accepted Answer

A) Placed on the firm polluting 
B) Greater than the cost of cleaning-up the pollution 
C) Placed on the consumer 
D) Less than the cost of cleaning up the pollution 
E) Set at a reasonable rate 
A) Placed on the firm polluting 
B) Greater than the cost of cleaning-up the pollution 
C) Placed on the consumer 
D) Less than the cost of cleaning up the pollution 
E) Set at a reasonable rate

Question 18

The Following Questions Refer to the graph below.  
-Given the PPC TT1,the cost of increasing pollution control from C1 to C2 is

Accepted Answer

A) A1A2 dollars' worth of other goods and services 
B) Q1q2 dollars' worth of other goods and services 
C) C1c2 dollars' worth of pollution control 
D) Tq1,dollars' worth of other goods and services 
E) Unable to be determined without additional information 
A) A1A2 dollars' worth of other goods and services 
B) Q1q2 dollars' worth of other goods and services 
C) C1c2 dollars' worth of pollution control 
D) Tq1,dollars' worth of other goods and services 
E) Unable to be determined without additional information

Question 19

Production and consumption in the cigarette market is too high because

Accepted Answer

A) Producers do not care about the health of their customers 
B) MPC is greater than the MSC 
C) MPB is greater than MSB 
D) MSB is greater than MPB 
E) MPB is less than MSB 
A) Producers do not care about the health of their customers 
B) MPC is greater than the MSC 
C) MPB is greater than MSB 
D) MSB is greater than MPB 
E) MPB is less than MSB

Question 20

The Following Questions Refer to the graph below.  
-What is the equilibrium quantity of the polluting firm's product in a market with no pollution regulation?

Accepted Answer

A) Q1 
B) Q2 
C) Q3 
D) 0 
E) It cannot be determined 
A) Q1 
B) Q2 
C) Q3 
D) 0 
E) It cannot be determined

The efficient level of pollution is zero only if the

If a pollution tax is placed on a firm emitting pollution,the firm will treat pollution,rather than pay the tax,as long as the tax is

The level of pollution increases when

Costs incurred by the producer to buy or hire resources are called

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D₁ and S₁ and there are positive social spillovers associated with the consumption of Z.Which curve could represent the MSB curve for Z?

When pollution is not regulated in the market,polluting firms will

If all benefits from consuming a good go to consumers,the demand curve is the same as the

The costs of pollution control to a society are measured by the value of the goods and services that must be given up to have the control.

Pollution is an example of a negative externality in consumption.

Complete elimination of pollution would only make economic sense if the cost to eliminate the last unit of pollution is less than the benefit from its elimination.

If the marginal social cost of attaining a certain level of water purity exceeds the marginal social benefit,the level of water purity should be decreaseD.

The establishment of clearly defined property rights to the environment would lead to an elimination of pollution.

Pollution is generated because firms use inefficient production processes.

The Following Questions Refer to the graph below. -What is the efficient quantity of the polluting firm's product?

Pollution consists of loading the environment with wastes that are not completely recycled,are not recycled fast enough,or are not recycled at all.

The Following Questions Refer to the graph below. -Suppose the current tax is T₁ and the government wishes to allow less pollution.It should

For a tax on pollution to be effective,it must be

The Following Questions Refer to the graph below. -Given the PPC TT₁,the cost of increasing pollution control from C₁ to C₂ is

Production and consumption in the cigarette market is too high because

The Following Questions Refer to the graph below. -What is the equilibrium quantity of the polluting firm's product in a market with no pollution regulation?

Alleviating Human Misery: The Role of Economic Reasoning

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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

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

The efficient level of pollution is zero only if the

If a pollution tax is placed on a firm emitting pollution,the firm will treat pollution,rather than pay the tax,as long as the tax is

The level of pollution increases when

Costs incurred by the producer to buy or hire resources are called

The Following Questions Refer to the graph below. -Assume that the current market demand and supply curves for Z are D1 and S1 and there are positive social spillovers associated with the consumption of Z.Which curve could represent the MSB curve for Z?

When pollution is not regulated in the market,polluting firms will

If all benefits from consuming a good go to consumers,the demand curve is the same as the

The costs of pollution control to a society are measured by the value of the goods and services that must be given up to have the control.

Pollution is an example of a negative externality in consumption.

Complete elimination of pollution would only make economic sense if the cost to eliminate the last unit of pollution is less than the benefit from its elimination.

If the marginal social cost of attaining a certain level of water purity exceeds the marginal social benefit,the level of water purity should be decreaseD.

The establishment of clearly defined property rights to the environment would lead to an elimination of pollution.

Pollution is generated because firms use inefficient production processes.

The Following Questions Refer to the graph below. -What is the efficient quantity of the polluting firm's product?

Pollution consists of loading the environment with wastes that are not completely recycled,are not recycled fast enough,or are not recycled at all.

The Following Questions Refer to the graph below. -Suppose the current tax is T1 and the government wishes to allow less pollution.It should

For a tax on pollution to be effective,it must be

The Following Questions Refer to the graph below. -Given the PPC TT1,the cost of increasing pollution control from C1 to C2 is

Production and consumption in the cigarette market is too high because

The Following Questions Refer to the graph below. -What is the equilibrium quantity of the polluting firm's product in a market with no pollution regulation?

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. -Assume that the current market demand and supply curves for Z are D₁ and S₁ and there are positive social spillovers associated with the consumption of Z.Which curve could represent the MSB curve for Z?

The Following Questions Refer to the graph below. -Suppose the current tax is T₁ and the government wishes to allow less pollution.It should

The Following Questions Refer to the graph below. -Given the PPC TT₁,the cost of increasing pollution control from C₁ to C₂ is