Question 1

A(n)_____ resource does not renew itself,and so is available in a finite amount.

Accepted Answer

A) open-access 
B) renewable 
C) cyclical 
D) recyclable 
E) exhaustible 
A) open-access 
B) renewable 
C) cyclical 
D) recyclable 
E) exhaustible

Question 2

If producers cannot afford the fees for pollution rights,then _____

Accepted Answer

A) they will adopt ways to pollute without getting detected. 
B) they will buy pollution rights illegally. 
C) they will have to sell their pollution rights. 
D) they will have to find a cheaper way to deal with their pollution. 
E) they will not be able to use their pollution rights. 
A) they will adopt ways to pollute without getting detected. 
B) they will buy pollution rights illegally. 
C) they will have to sell their pollution rights. 
D) they will have to find a cheaper way to deal with their pollution. 
E) they will not be able to use their pollution rights.

Question 3

The United Nations reports that at least 11 of the world's 15 primary fishing grounds are seriously depleted.This is an example of a(n)_____

Accepted Answer

A) negative externality. 
B) transaction cost. 
C) sunk cost. 
D) positive externality. 
E) moral hazard. 
A) negative externality. 
B) transaction cost. 
C) sunk cost. 
D) positive externality. 
E) moral hazard.

Question 4

The marginal social benefit of good air _____

Accepted Answer

A) declines as air quality improves. 
B) rises as air quality improves. 
C) remains constant as air quality improves. 
D) initially falls but rises with higher improvement. 
E) initially rises but becomes negative with greater improvement. 
A) declines as air quality improves. 
B) rises as air quality improves. 
C) remains constant as air quality improves. 
D) initially falls but rises with higher improvement. 
E) initially rises but becomes negative with greater improvement.

Question 5

Which of the following accounts for the recent decline in the growth of trash-to-energy plants?

Accepted Answer

A) decline in energy prices 
B) less favorable tax treatment 
C) decline in the amount of garbage per capita 
D) inclusion of subsidies 
E) high cost of legal consultation 
A) decline in energy prices 
B) less favorable tax treatment 
C) decline in the amount of garbage per capita 
D) inclusion of subsidies 
E) high cost of legal consultation

Question 6

Marginal external cost is _____

Accepted Answer

A) the additional cost imposed on society by producing an extra unit of a good. 
B) the cost of producing an extra unit of damaged goods. 
C) the additional cost of importing extra units of a good. 
D) the total cost to society of producing a good. 
E) the marginal social cost divided by the marginal private cost. 
A) the additional cost imposed on society by producing an extra unit of a good. 
B) the cost of producing an extra unit of damaged goods. 
C) the additional cost of importing extra units of a good. 
D) the total cost to society of producing a good. 
E) the marginal social cost divided by the marginal private cost.

Question 7

Markets for pollution rights _____

Accepted Answer

A) assign property rights to those firms which have high market shares. 
B) assign property rights to those who value them least. 
C) allow the government to assign property rights. 
D) enable those who value them most to pollute. 
E) requires government intervention. 
A) assign property rights to those firms which have high market shares. 
B) assign property rights to those who value them least. 
C) allow the government to assign property rights. 
D) enable those who value them most to pollute. 
E) requires government intervention.

Question 8

Which of the following creates a positive externality?

Accepted Answer

A) a paper mill that pollutes a river 
B) a stock market crash 
C) a neighbor who beautifies her lawn 
D) a car that emits carbon monoxide 
E) a person who smokes in a public place 
A) a paper mill that pollutes a river 
B) a stock market crash 
C) a neighbor who beautifies her lawn 
D) a car that emits carbon monoxide 
E) a person who smokes in a public place

Question 9

Exhibit 17.1
  
-Refer to Exhibit 17.1,which shows a market for electricity.What is the marginal external cost of electricity?

Accepted Answer

A) The marginal external cost is negative. 
B) The marginal external cost equals the marginal social benefit. 
C) The marginal external cost equals the marginal private cost. 
D) The marginal external cost equals the cost of pollution imposed on society. 
E) The marginal external cost exceeds the marginal private cost of production. 
A) The marginal external cost is negative. 
B) The marginal external cost equals the marginal social benefit. 
C) The marginal external cost equals the marginal private cost. 
D) The marginal external cost equals the cost of pollution imposed on society. 
E) The marginal external cost exceeds the marginal private cost of production.

Question 10

Exhibit 17.1
  
-Refer to Exhibit 17.1,which shows a market for electricity.The marginal social cost exceeds society's marginal benefit of electricity at _____

Accepted Answer

A)  point a. 
B)  point b. 
C)  point c. 
D)  point d. 
E)  demand curve D. 
A)  point a. 
B)  point b. 
C)  point c. 
D)  point d. 
E)  demand curve D.

Question 11

Exhibit 17.4
  
-Refer to Exhibit 17.4,which shows the market for pollution rights in an economy.The social welfare loss that results from 70 units of air quality is shown by area _____

Accepted Answer

A) edcb. 
B) eda. 
C) bac. 
D) adc. 
E) eab. 
A) edcb. 
B) eda. 
C) bac. 
D) adc. 
E) eab.

A(n)_____ resource does not renew itself,and so is available in a finite amount.

If producers cannot afford the fees for pollution rights,then _____

The United Nations reports that at least 11 of the world's 15 primary fishing grounds are seriously depleted.This is an example of a(n)_____

The marginal social benefit of good air _____

Which of the following accounts for the recent decline in the growth of trash-to-energy plants?

Marginal external cost is _____

Markets for pollution rights _____

Which of the following creates a positive externality?

Exhibit 17.1 -Refer to Exhibit 17.1,which shows a market for electricity.What is the marginal external cost of electricity?

Exhibit 17.1 -Refer to Exhibit 17.1,which shows a market for electricity.The marginal social cost exceeds society's marginal benefit of electricity at _____

Exhibit 17.4 -Refer to Exhibit 17.4,which shows the market for pollution rights in an economy.The social welfare loss that results from 70 units of air quality is shown by area _____

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Elasticity of Demand and Supply

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, interest, entrepreneurship, and Corporate Finance

Transaction Costs, asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Poverty and Redistribution

International Trade

International Finance

Economic Development

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Exam 17: Externalities and the Environment

A(n)_____ resource does not renew itself,and so is available in a finite amount.

If producers cannot afford the fees for pollution rights,then _____

The United Nations reports that at least 11 of the world's 15 primary fishing grounds are seriously depleted.This is an example of a(n)_____

The marginal social benefit of good air _____

Which of the following accounts for the recent decline in the growth of trash-to-energy plants?

Marginal external cost is _____

Markets for pollution rights _____

Which of the following creates a positive externality?

Exhibit 17.1 -Refer to Exhibit 17.1,which shows a market for electricity.What is the marginal external cost of electricity?

Exhibit 17.1 -Refer to Exhibit 17.1,which shows a market for electricity.The marginal social cost exceeds society's marginal benefit of electricity at _____

Exhibit 17.4 -Refer to Exhibit 17.4,which shows the market for pollution rights in an economy.The social welfare loss that results from 70 units of air quality is shown by area _____

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Elasticity of Demand and Supply

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, interest, entrepreneurship, and Corporate Finance

Transaction Costs, asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Poverty and Redistribution

International Trade

International Finance

Economic Development

Filters