Question 1

Under U.S. law, the technology-based effluent limitations are

Accepted Answer

A)  not aligned with the nation's water quality objectives 
B)  used to control discharges from point sources through permits 
C)  applied uniformly within any designated group 
D)  all of the above 
A)  not aligned with the nation's water quality objectives 
B)  used to control discharges from point sources through permits 
C)  applied uniformly within any designated group 
D)  all of the above D

Question 2

According to the textbook application, efforts to restore the Chesapeake Bay have been markedly successful.

Accepted Answer

A) True 
 B)False  False

Question 3

All point sources are subject to effluent limitations, which are imposed uniformly within each designated group.

Accepted Answer

A) True 
 B)False  True

Question 4

Suppose two point sources are discharging phosphorus into Wisconsin's Fox River and face the following abatement costs for this pollutant:
Point Source 1: TAC1 = 500 + 0.35(A1)2
MAC1 = 0.7A1
Point Source 2: TAC2 = 750 + 1.05(A2)2
MAC2 = 2.1A2,
where A1 and A2 represent the abatement of phosphorus effluents in pounds by Source 1 and Source 2, respectively, and TAC and MAC are measured in hundreds of dollars.
Assume that the state environmental authority has set the total maximum daily load (TMDL) for the Fox River. To achieve this limit, 40 pounds of phosphorus must be abated across the two point sources. Use this information to answer the following questions.
a. If a uniform abatement standard is used by the regulatory authority, what would be the dollar values of TAC and MAC for each source?
b. Based on your answer to part (a), is there an economic incentive for the sources to participate in the trading program? Explain briefly.
c. Quantify the cost savings associated with a cost-effective abatement allocation achieved through trading.
d. What should be the price level of the tradable permits to achieve the cost-effective solution?

Accepted Answer

1a. Based on a uniform abatement standar

Question 5

If water quality law prevents the achievement of the efficiency criterion

Accepted Answer

A)  that law must be repealed 
B)  a "second-best" economic solution is to identify cost-effective policy initiatives 
C)  cost-effectiveness is also prevented 
D)  polluting sources should abate up to the point where total social benefits are maximized 
A)  that law must be repealed 
B)  a "second-best" economic solution is to identify cost-effective policy initiatives 
C)  cost-effectiveness is also prevented 
D)  polluting sources should abate up to the point where total social benefits are maximized

Question 6

A volume-based effluent fee is based on the degree of harm linked to the contaminant released.

Accepted Answer

A) True 
 B)False

Question 7

An advantage of the effluent limitations is that they are aligned with the national water quality objectives.

Accepted Answer

A) True 
 B)False

Question 8

Empirical research indicates that federal grants added dollar-for-dollar to POTW construction that would not otherwise have been completed at the local level.

Accepted Answer

A) True 
 B)False

Question 9

Among the identified point sources contributing to the pollution of Puget Sound are Dow Chemical (D) and Chevron (C). Each firm's cost functions are shown below.
MACD = 2.5AD MACC = 3.75AC
TACD = 1.25AD2 TACC = 1.875AC2
To meet the effluent limits under the Clean Water Act, each firm has an NPDES permit to release some fixed amount of effluents, so each must abate 30 units.
a. At the uniform abatement standard described above, find total abatement costs for both firms.
b. Instead of a uniform standard, suppose each firm faces a volume-based, marginal effluent fee (MEF) of $90. How much will each firm abate?
c.. If each firm's production is associated with the release of 50 units of effluent, how much will each pay in total effluent fees when facing the $90 marginal effluent fee?

Accepted Answer

a. Each firm's TACs at the uniform abate

Question 10

From an economic perspective, the zero discharge goal meets the efficiency criterion by accounting for both the benefits and costs of that objective.

Accepted Answer

A) True 
 B)False

Question 11

Tradeable effluent permit markets can lead to cost savings as long as polluting sources face different marginal abatement costs to control the same pollutant.

Accepted Answer

A) True 
 B)False

Question 12

The effluent limitations are set to maximize net benefits.

Accepted Answer

A) True 
 B)False

Question 13

According to the text application, mercury contamination is relatively easy to control because mercury emissions tend to remain close to the polluting source.

Accepted Answer

A) True 
 B)False

Question 14

According to available data, most water bodies in the United States have met the zero discharge goal.

Accepted Answer

A) True 
 B)False

Question 15

The presidential Executive Order that is dedicated to the restoration of the Chesapeake Bay proposes a strictly command-and-control approach to restore and protect this natural resource.

Accepted Answer

A) True 
 B)False

Question 16

Giving states control of nonpoint source pollution

Accepted Answer

A)  has no advantages 
B)  can be problematic because states generally have inadequate data to assess the problem 
C)  is advantageous because it results in greater consistency of control 
D)  was not the original intent of the 1987 legislation 
A)  has no advantages 
B)  can be problematic because states generally have inadequate data to assess the problem 
C)  is advantageous because it results in greater consistency of control 
D)  was not the original intent of the 1987 legislation

Question 17

The watershed approach

Accepted Answer

A)  is a framework used to coordinate the management of each hydrologically defined area 
B)  has been rejected by U.S. policy makers 
C)  has received no financial support from the federal level of government 
D)  does not allow for the use of water quality trading 
A)  is a framework used to coordinate the management of each hydrologically defined area 
B)  has been rejected by U.S. policy makers 
C)  has received no financial support from the federal level of government 
D)  does not allow for the use of water quality trading

Question 18

Polluting sources have an incentive to abate up to the point where their Marginal Abatement Cost (MAC) equals the Marginal Effluent Fee (MEF), and to pay the fee beyond that point.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that the costs and benefits of achieving water quality in New York are modeled as shown below. Use these relationships for any or all of questions .
MSB = 80 - 2A MSC = 20 + 2A
TSB = 80A - AS1U1P12S1S1P0 TSC = 20A + AS1U1P12S1S1P0,
where A is the abatement level for conventional pollutants.
-In this case, the abatement level associated with benefit-based standards would be:

Accepted Answer

A)  40 
B)  15 
C)  10 
D)  none of the above 
A)  40 
B)  15 
C)  10 
D)  none of the above

Question 20

The National Pollutant Discharge Elimination System (NPDES) is a permitting system solely for publicly owned treatment works (POTWs).

Accepted Answer

A) True 
 B)False

Under U.S. law, the technology-based effluent limitations are

According to the textbook application, efforts to restore the Chesapeake Bay have been markedly successful.

All point sources are subject to effluent limitations, which are imposed uniformly within each designated group.

If water quality law prevents the achievement of the efficiency criterion

A volume-based effluent fee is based on the degree of harm linked to the contaminant released.

An advantage of the effluent limitations is that they are aligned with the national water quality objectives.

Empirical research indicates that federal grants added dollar-for-dollar to POTW construction that would not otherwise have been completed at the local level.

From an economic perspective, the zero discharge goal meets the efficiency criterion by accounting for both the benefits and costs of that objective.

Tradeable effluent permit markets can lead to cost savings as long as polluting sources face different marginal abatement costs to control the same pollutant.

The effluent limitations are set to maximize net benefits.

According to the text application, mercury contamination is relatively easy to control because mercury emissions tend to remain close to the polluting source.

According to available data, most water bodies in the United States have met the zero discharge goal.

The presidential Executive Order that is dedicated to the restoration of the Chesapeake Bay proposes a strictly command-and-control approach to restore and protect this natural resource.

Giving states control of nonpoint source pollution

The watershed approach

Polluting sources have an incentive to abate up to the point where their Marginal Abatement Cost (MAC) equals the Marginal Effluent Fee (MEF), and to pay the fee beyond that point.

The National Pollutant Discharge Elimination System (NPDES) is a permitting system solely for publicly owned treatment works (POTWs).

The Role of Economics in Environmental Management

Modeling the Market Process: a Review of the Basics

Modeling Market Failure

Conventional Solutions to Environmental Problems: Command-And-Control Approach

Economic Solutions to Environmental Problems: the Market Approach

Environmental Risk Analysis

Assessing Benefits for Environmental Decision Making

Assessing Costs for Environmental Decision Making

Benefit-Cost Analysis in Environmental Decision Making

Defining Air Quality: the Standard-Setting Process

Improving Air Quality: Controlling Mobile Sources

Improving Air Quality: Controlling Stationary Sources

Global Air Quality: Policies for Ozone Depletion and Climate Change

Defining Water Quality: the Standard-Setting Process

Protecting Safe Drinking Water

Managing Hazardous Solid Waste and Waste Sites

Managing Municipal Solid Waste

Controlling Pesticides and Toxic Chemicals

Sustainable Development: International Environmental Agreements and International Trade

Sustainable Approaches: Industrial Ecology and Pollution Prevention

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Exam 15: Improving Water Quality: Controlling Point and Nonpoint Sources

Under U.S. law, the technology-based effluent limitations are

According to the textbook application, efforts to restore the Chesapeake Bay have been markedly successful.

All point sources are subject to effluent limitations, which are imposed uniformly within each designated group.

If water quality law prevents the achievement of the efficiency criterion

A volume-based effluent fee is based on the degree of harm linked to the contaminant released.

An advantage of the effluent limitations is that they are aligned with the national water quality objectives.

Empirical research indicates that federal grants added dollar-for-dollar to POTW construction that would not otherwise have been completed at the local level.

From an economic perspective, the zero discharge goal meets the efficiency criterion by accounting for both the benefits and costs of that objective.

Tradeable effluent permit markets can lead to cost savings as long as polluting sources face different marginal abatement costs to control the same pollutant.

The effluent limitations are set to maximize net benefits.

According to the text application, mercury contamination is relatively easy to control because mercury emissions tend to remain close to the polluting source.

According to available data, most water bodies in the United States have met the zero discharge goal.

The presidential Executive Order that is dedicated to the restoration of the Chesapeake Bay proposes a strictly command-and-control approach to restore and protect this natural resource.

Giving states control of nonpoint source pollution

The watershed approach

Polluting sources have an incentive to abate up to the point where their Marginal Abatement Cost (MAC) equals the Marginal Effluent Fee (MEF), and to pay the fee beyond that point.

The National Pollutant Discharge Elimination System (NPDES) is a permitting system solely for publicly owned treatment works (POTWs).

The Role of Economics in Environmental Management

Modeling the Market Process: a Review of the Basics

Modeling Market Failure

Conventional Solutions to Environmental Problems: Command-And-Control Approach

Economic Solutions to Environmental Problems: the Market Approach

Environmental Risk Analysis

Assessing Benefits for Environmental Decision Making

Assessing Costs for Environmental Decision Making

Benefit-Cost Analysis in Environmental Decision Making

Defining Air Quality: the Standard-Setting Process

Improving Air Quality: Controlling Mobile Sources

Improving Air Quality: Controlling Stationary Sources

Global Air Quality: Policies for Ozone Depletion and Climate Change

Defining Water Quality: the Standard-Setting Process

Protecting Safe Drinking Water

Managing Hazardous Solid Waste and Waste Sites

Managing Municipal Solid Waste

Controlling Pesticides and Toxic Chemicals

Sustainable Development: International Environmental Agreements and International Trade

Sustainable Approaches: Industrial Ecology and Pollution Prevention

Filters