Question 1

Which statement gives a reason for opposition to the 1990 amendments to the Clean Air Act?

Accepted Answer

A)  An industry study conducted in 1989 predicted the loss of up to 4 million jobs. 
B)  The nuclear power plants that would be built as a result were unwanted in most communities. 
C)  The changes did not allow older plants to purchase emission allowances from newer plants. 
D)  Environmentalists favored an allowance and trading system. 
A)  An industry study conducted in 1989 predicted the loss of up to 4 million jobs. 
B)  The nuclear power plants that would be built as a result were unwanted in most communities. 
C)  The changes did not allow older plants to purchase emission allowances from newer plants. 
D)  Environmentalists favored an allowance and trading system. A

Question 2

Currently,what proportion of Americans smoke?

Accepted Answer

A)  less than 3% 
B)  approximately 10% 
C)  nearly 20% 
D)  more than 30% 
A)  less than 3% 
B)  approximately 10% 
C)  nearly 20% 
D)  more than 30% C

Question 3

Chay and Greenstone (2003)estimated the effect of the Clean Air Act of 1970 by comparing the health outcomes of people in attainment areas with those of people in nonattainment areas both before and after the law was passed.What did they find?

Accepted Answer

A)  Reduced emissions led to a decrease in infant mortality. 
B)  Reduced emissions did not affect infant mortality. 
C)  The Clean Air Act of 1970 did not affect emissions in any states. 
D)  The Clean Air Act of 1970 affected different regions of the country in the same way. 
A)  Reduced emissions led to a decrease in infant mortality. 
B)  Reduced emissions did not affect infant mortality. 
C)  The Clean Air Act of 1970 did not affect emissions in any states. 
D)  The Clean Air Act of 1970 affected different regions of the country in the same way. A

Question 4

Which statement gives an unintended consequence of the 1970 Clean Air Act?

Accepted Answer

A)  Utilities relocated large numbers of power plants to Mexico. 
B)  Utilities began operating more nuclear power plants. 
C)  Utilities ran plants built prior to 1970 longer than they would have otherwise. 
D)  The coal mining industry suffered massive job losses. 
A)  Utilities relocated large numbers of power plants to Mexico. 
B)  Utilities began operating more nuclear power plants. 
C)  Utilities ran plants built prior to 1970 longer than they would have otherwise. 
D)  The coal mining industry suffered massive job losses.

Question 5

If smokers are less productive in the workplace and the law were to prohibit differential pay on the basis of smoking behavior,then smoking would:

Accepted Answer

A)  cause a positive externality. 
B)  cause a negative externality. 
C)  not cause an externality. 
D)  internalize the externality. 
A)  cause a positive externality. 
B)  cause a negative externality. 
C)  not cause an externality. 
D)  internalize the externality.

Question 6

The 1990 amendments to the Clean Air Act included a regulation that mandated:

Accepted Answer

A)  significant reductions in sulfur dioxide emissions by all plants,even older ones. 
B)  significant reductions in sulfur dioxide emissions by newly constructed plants only. 
C)  replacement of all older power plants with new plants utilizing cleaner technology. 
D)  no further reductions in sulfur dioxide emissions since the goals established in 1970 had been achieved. 
A)  significant reductions in sulfur dioxide emissions by all plants,even older ones. 
B)  significant reductions in sulfur dioxide emissions by newly constructed plants only. 
C)  replacement of all older power plants with new plants utilizing cleaner technology. 
D)  no further reductions in sulfur dioxide emissions since the goals established in 1970 had been achieved.

Question 7

The central estimate for the ____________ due to smoking (excluding secondhand smoke)are ___________ the level of taxation.

Accepted Answer

A)  externalities; greater than 
B)  externalities; less than 
C)  internalities; greater than 
D)  internalities; less than 
A)  externalities; greater than 
B)  externalities; less than 
C)  internalities; greater than 
D)  internalities; less than

Question 8

The problem addressed by the 1997 Kyoto treaty was getting _________ in 1997; the problem addressed by the Montreal Protocol of 1987 was getting _________ in 1987.

Accepted Answer

A)  better quickly; better slowly 
B)  better slowly; worse quickly 
C)  worse quickly; worse slowly 
D)  worse slowly; worse quickly 
A)  better quickly; better slowly 
B)  better slowly; worse quickly 
C)  worse quickly; worse slowly 
D)  worse slowly; worse quickly

Question 9

The Obama administration's Clean Power Plan calls for:

Accepted Answer

A)  reductions in carbon dioxide emissions from newly constructed power plants only. 
B)  reductions in carbon dioxide emissions from existing power plants. 
C)  uniform reductions in every state,regardless of differences across states. 
D)  closing all coal-fired power plants by the year 2030. 
A)  reductions in carbon dioxide emissions from newly constructed power plants only. 
B)  reductions in carbon dioxide emissions from existing power plants. 
C)  uniform reductions in every state,regardless of differences across states. 
D)  closing all coal-fired power plants by the year 2030.

Question 10

Which of statement is accurate regarding the effect of amendments passed to the Clean Air Act in 1990?

Accepted Answer

A)  The amendments encouraged utilities to operate older power plants longer than they would have otherwise. 
B)  The amendments had little effect on emissions overall,although they did affect local areas. 
C)  Tradable emissions permit systems work well in practice. 
D)  Tradable emissions permit systems do not work well in practice. 
A)  The amendments encouraged utilities to operate older power plants longer than they would have otherwise. 
B)  The amendments had little effect on emissions overall,although they did affect local areas. 
C)  Tradable emissions permit systems work well in practice. 
D)  Tradable emissions permit systems do not work well in practice.

Question 11

Suppose smoking increases health care costs in a society in which everyone has health insurance.If smokers are charged higher prices for health insurance,the smoking externality is:

Accepted Answer

A)  internalized through actuarial adjustments. 
B)  internalized through compensating differentials. 
C)  positive instead of negative. 
D)  not internalized. 
A)  internalized through actuarial adjustments. 
B)  internalized through compensating differentials. 
C)  positive instead of negative. 
D)  not internalized.

Question 12

Which statement implies that smoking does NOT cause a negative externality?

Accepted Answer

A)  The health costs of the uninsured are passed on to others. 
B)  Secondhand smoke has serious effects not considered by smokers when they decide to smoke. 
C)  Fire damages nonsmokers' property and smokers are more likely to start fires. 
D)  Since smokers die early,they won't have high nursing home costs. 
A)  The health costs of the uninsured are passed on to others. 
B)  Secondhand smoke has serious effects not considered by smokers when they decide to smoke. 
C)  Fire damages nonsmokers' property and smokers are more likely to start fires. 
D)  Since smokers die early,they won't have high nursing home costs.

Question 13

The Clean Air Act of 1970 and the 1990 amendments can be judged as a success if the:

Accepted Answer

A)  benefits of the regulations resulted in improved health outcomes. 
B)  costs of the regulations did not include significant job loss. 
C)  the benefits of lowering particulate emissions are greater than the net economic costs. 
D)  regulations result in a reduction in greenhouse gas emissions and acid rain. 
A)  benefits of the regulations resulted in improved health outcomes. 
B)  costs of the regulations did not include significant job loss. 
C)  the benefits of lowering particulate emissions are greater than the net economic costs. 
D)  regulations result in a reduction in greenhouse gas emissions and acid rain.

Question 14

The damage a person does to himself or herself through adverse health (or other)behavior is referred to as:

Accepted Answer

A)  an actuarial adjustment. 
B)  an externality. 
C)  an internality. 
D)  a self-control problem. 
A)  an actuarial adjustment. 
B)  an externality. 
C)  an internality. 
D)  a self-control problem.

Question 15

Under the 1997 Kyoto treaty,the industrialized signatories:

Accepted Answer

A)  are not allowed to trade emissions rights. 
B)  are allowed to trade emissions rights among themselves,provided emissions goals are achieved. 
C)  must reduce emissions in the least cost-effective way,leading most industrialized countries to refuse to sign the treaty. 
D)  must reduce emissions only when it is cost-effective,resulting in participation by countries like the United States. 
A)  are not allowed to trade emissions rights. 
B)  are allowed to trade emissions rights among themselves,provided emissions goals are achieved. 
C)  must reduce emissions in the least cost-effective way,leading most industrialized countries to refuse to sign the treaty. 
D)  must reduce emissions only when it is cost-effective,resulting in participation by countries like the United States.

Question 16

In the standard utility maximization model,smoking is a result of:

Accepted Answer

A)  irrational choice. 
B)  a miscalculation of the benefits and costs of smoking. 
C)  rational choice. 
D)  perfect information about the costs of smoking. 
A)  irrational choice. 
B)  a miscalculation of the benefits and costs of smoking. 
C)  rational choice. 
D)  perfect information about the costs of smoking.

Question 17

Contrast the views of supporters and opponents of the 2012 Obama administration regulation related to greenhouse gas emissions by power plants in the United States.

Accepted Answer

A move away from coal to natural gas-pow

Question 18

In the fall of 2014,a landmark agreement to slow emissions growth was reached between:

Accepted Answer

A)  China and the United States. 
B)  Russia and China. 
C)  Russia and the United States. 
D)  all industrialized countries with the exception of the United States. 
A)  China and the United States. 
B)  Russia and China. 
C)  Russia and the United States. 
D)  all industrialized countries with the exception of the United States.

Question 19

Scientists discovered a hole opening up in the ozone layer in the 1980s.As a result,the international community adopted the _____ in September of 1987.

Accepted Answer

A)  Kyoto Treaty 
B)  Clean Air Act 
C)  Montreal Protocol 
D)  Antarctica Accord 
A)  Kyoto Treaty 
B)  Clean Air Act 
C)  Montreal Protocol 
D)  Antarctica Accord

Question 20

Which of the following is a finding of the empirical evidence on raising the legal drinking age to 21?

Accepted Answer

A)  Lowering the drinking age led to 6% to 17% less drinking among 18- to 20-year-olds. 
B)  Those who start drinking earlier are less likely to drink later in life. 
C)  Lower drinking ages are associated with a 17% increase in the rate of motor vehicle deaths for 18- to 20-year-olds. 
D)  Lowering the drinking age has no adverse effects on those aged 18 to 20. 
A)  Lowering the drinking age led to 6% to 17% less drinking among 18- to 20-year-olds. 
B)  Those who start drinking earlier are less likely to drink later in life. 
C)  Lower drinking ages are associated with a 17% increase in the rate of motor vehicle deaths for 18- to 20-year-olds. 
D)  Lowering the drinking age has no adverse effects on those aged 18 to 20.

Exam 6: Externalities in Action- Environmental and Health Externalities

Which statement gives a reason for opposition to the 1990 amendments to the Clean Air Act?

Currently,what proportion of Americans smoke?

Chay and Greenstone (2003)estimated the effect of the Clean Air Act of 1970 by comparing the health outcomes of people in attainment areas with those of people in nonattainment areas both before and after the law was passed.What did they find?

Which statement gives an unintended consequence of the 1970 Clean Air Act?

If smokers are less productive in the workplace and the law were to prohibit differential pay on the basis of smoking behavior,then smoking would:

The 1990 amendments to the Clean Air Act included a regulation that mandated:

The central estimate for the ____________ due to smoking (excluding secondhand smoke)are ___________ the level of taxation.

The problem addressed by the 1997 Kyoto treaty was getting _________ in 1997; the problem addressed by the Montreal Protocol of 1987 was getting _________ in 1987.

The Obama administration's Clean Power Plan calls for:

Which of statement is accurate regarding the effect of amendments passed to the Clean Air Act in 1990?

Suppose smoking increases health care costs in a society in which everyone has health insurance.If smokers are charged higher prices for health insurance,the smoking externality is:

Which statement implies that smoking does NOT cause a negative externality?

The Clean Air Act of 1970 and the 1990 amendments can be judged as a success if the:

The damage a person does to himself or herself through adverse health (or other)behavior is referred to as:

Under the 1997 Kyoto treaty,the industrialized signatories:

In the standard utility maximization model,smoking is a result of:

Contrast the views of supporters and opponents of the 2012 Obama administration regulation related to greenhouse gas emissions by power plants in the United States.

In the fall of 2014,a landmark agreement to slow emissions growth was reached between:

Scientists discovered a hole opening up in the ozone layer in the 1980s.As a result,the international community adopted the _____ in September of 1987.

Which of the following is a finding of the empirical evidence on raising the legal drinking age to 21?

Why Study Public Finance

Theoretical Tools of Public Finance

Empirical Tools of Public Finance

Budget Analysis and Deficit Financing

Externalities- Problems and Solutions

Public Goods

Cost-Benefit Analysis

Political Economy

State and Local Government Expenditures

Education

Social Insurance- the New Function of Government

Social Security

Unemployment Insurance, disability Insurance, and Workers Compensation

Health Insurance I- Health Economics and Private Health Insurance

Health Insurance Ii- Medicare, medicaid, and Health Care Reform

Income Distribution and Welfare Programs

Taxation- How It Works and What It Means

The Equity Implications of Taxation- Tax Incidence

Taxes on Labor Supply

Taxes on Savings

Taxes on Risk Taking and Wealth

Taxation of Business Income

Fundamental Tax Reform and Consumption Tax

Filters

The central estimate for the __ due to smoking (excluding secondhand smoke)are _ the level of taxation.

The problem addressed by the 1997 Kyoto treaty was getting _ in 1997; the problem addressed by the Montreal Protocol of 1987 was getting _ in 1987.