Question 1

The level of pollution at which the marginal benefits equal the marginal cost of cleaning up is always

Accepted Answer

A) the zero pollution level. 
B) the optimal quantity of pollution. 
C) the pollution maximum. 
D) the pollution minimum. 
A) the zero pollution level. 
B) the optimal quantity of pollution. 
C) the pollution maximum. 
D) the pollution minimum. B

Question 2

Which of the following was signed in the Kyoto Protocol?

Accepted Answer

A) The Framework Convention on Climate Change 
B) The Zero Greenhouse Gas Agreement 
C) The Treaty on Global Warming 
D) The Emission Trading Scheme 
A) The Framework Convention on Climate Change 
B) The Zero Greenhouse Gas Agreement 
C) The Treaty on Global Warming 
D) The Emission Trading Scheme A

Question 3

Attaining higher and higher levels of air cleanliness causes

Accepted Answer

A) additional costs to rise to increasingly high levels. 
B) larger and larger increases in per capita incomes. 
C) additional costs to fall to lower and lower levels. 
D) larger and larger marginal benefits to society. 
A) additional costs to rise to increasingly high levels. 
B) larger and larger increases in per capita incomes. 
C) additional costs to fall to lower and lower levels. 
D) larger and larger marginal benefits to society. A

Question 4

The problem of overfishing in waters that are commonly owned can be solved by

Accepted Answer

A) the use of the Coase Theorem. 
B) establishing property rights for fishing in the waters. 
C) subsidizing fishing. 
D) allowing the market to ration fish. 
A) the use of the Coase Theorem. 
B) establishing property rights for fishing in the waters. 
C) subsidizing fishing. 
D) allowing the market to ration fish.

Question 5

Using a graph,show the effects of a negative externality.Where is the socially optimum point of output? How can it be achieved?

Accepted Answer

@#IMG-DLM& See the above figure.E is the equilibri

Question 6

When negative externalities exist,a voluntary agreement can be negotiated.Which of the following statements is true?

Accepted Answer

A) Voluntary agreements usually do not work since the owner has no incentive to negotiate. 
B) Transactions costs must be low relative to the expected benefits of reaching an agreement. 
C) Voluntary agreements are difficult to negotiate because they usually involve government intervention. 
D) Voluntary agreements always leave the owner worse off. 
A) Voluntary agreements usually do not work since the owner has no incentive to negotiate. 
B) Transactions costs must be low relative to the expected benefits of reaching an agreement. 
C) Voluntary agreements are difficult to negotiate because they usually involve government intervention. 
D) Voluntary agreements always leave the owner worse off.

Question 7

Which of the following statements concerning pollution is correct?

Accepted Answer

A) Economic efficiency requires that pollution be completely eliminated. 
B) Economic efficiency dictates that the optimal amount of pollution arises at the point at which price equals private marginal cost. 
C) Pollution should be reduced to the point at which the marginal benefit from further reduction equals the marginal cost of further reduction. 
D) Pollution should be reduced to the extent necessary to return production to the production possibilities frontier. 
A) Economic efficiency requires that pollution be completely eliminated. 
B) Economic efficiency dictates that the optimal amount of pollution arises at the point at which price equals private marginal cost. 
C) Pollution should be reduced to the point at which the marginal benefit from further reduction equals the marginal cost of further reduction. 
D) Pollution should be reduced to the extent necessary to return production to the production possibilities frontier.

Question 8

Which of the following best describes the impact of the Emissions Trading Scheme in the European Union between 2005 and the late 2000s?

Accepted Answer

A) Overall greenhouse gas emissions increased. 
B) Overall greenhouse gas emissions decreased. 
C) Overall greenhouse gas emissions were totally eliminated. 
D) Overall greenhouse gas emissions were constant. 
A) Overall greenhouse gas emissions increased. 
B) Overall greenhouse gas emissions decreased. 
C) Overall greenhouse gas emissions were totally eliminated. 
D) Overall greenhouse gas emissions were constant.

Question 9

Pollution

Accepted Answer

A) creates a negative externality. 
B) is increased when property rights are defined. 
C) is the result of capitalism. 
D) exists because air and water are privately owned resources. 
A) creates a negative externality. 
B) is increased when property rights are defined. 
C) is the result of capitalism. 
D) exists because air and water are privately owned resources.

Question 10

The costs of pollution abatement

Accepted Answer

A) increase at an increasing rate with the increase in pollution abatement. 
B) increase at a decreasing rate with the increase in pollution abatement. 
C) decrease at an increasing rate with the increase in pollution abatement. 
D) decrease at a decreasing rate with the increase in pollution abatement. 
A) increase at an increasing rate with the increase in pollution abatement. 
B) increase at a decreasing rate with the increase in pollution abatement. 
C) decrease at an increasing rate with the increase in pollution abatement. 
D) decrease at a decreasing rate with the increase in pollution abatement.

Question 11

If a firm is not forced to pay for external costs,it will

Accepted Answer

A) continue to overproduce the good. 
B) continue to under produce the good. 
C) request a subsidy from the government. 
D) raise prices. 
A) continue to overproduce the good. 
B) continue to under produce the good. 
C) request a subsidy from the government. 
D) raise prices.

Question 12

Which of the following constitutes an external cost of driving an automobile?

Accepted Answer

A) insurance 
B) fuel 
C) pollution 
D) wear and tear 
A) insurance 
B) fuel 
C) pollution 
D) wear and tear

Question 13

When social costs for using a scarce resource are included,then there is

Accepted Answer

A) a decrease in the production of the good. 
B) a negative externality. 
C) a decrease in the price of the good. 
D) a positive externality. 
A) a decrease in the production of the good. 
B) a negative externality. 
C) a decrease in the price of the good. 
D) a positive externality.

Question 14

-Refer to the above figure.If the marginal cost curve for pollution abatement shifts to the right,everything considered,the

Accepted Answer

A) degree of air quality or cleanliness will also decrease. 
B) the degree of air quality or cleanliness will stay unchanged. 
C) the degree of air quality will improve. 
D) the marginal cost of pollution abatement has nothing to do with air quality. 
A) degree of air quality or cleanliness will also decrease. 
B) the degree of air quality or cleanliness will stay unchanged. 
C) the degree of air quality will improve. 
D) the marginal cost of pollution abatement has nothing to do with air quality.

Question 15

Private costs are the same as

Accepted Answer

A) implicit costs. 
B) external costs. 
C) public costs. 
D) internal costs. 
A) implicit costs. 
B) external costs. 
C) public costs. 
D) internal costs.

Question 16

Today,the earth has ________ of all of the species that have ever lived.

Accepted Answer

A) less than 1 percent 
B) about 50 percent 
C) about 99 percent 
D) 100 percent 
A) less than 1 percent 
B) about 50 percent 
C) about 99 percent 
D) 100 percent

Question 17

Suppose there are two firms on a river and the production processes of both require clean water.The upstream firm's process dirties the water,which it dumps back into the river.The downstream firm must clean the water before using it in its production process.If the two firms would merge,

Accepted Answer

A) the external costs of the merged firm would equal the external costs of the upstream firm,which would then be passed on to its customers. 
B) the total costs of production fall since the external costs disappear. 
C) the external costs of the upstream firm are private costs after the merger. 
D) the internal costs of the downstream firm become external costs of the merged firm. 
A) the external costs of the merged firm would equal the external costs of the upstream firm,which would then be passed on to its customers. 
B) the total costs of production fall since the external costs disappear. 
C) the external costs of the upstream firm are private costs after the merger. 
D) the internal costs of the downstream firm become external costs of the merged firm.

Question 18

It is assumed that the marginal benefit of air cleanliness falls with the degree of cleanliness since

Accepted Answer

A) the marginal cost of air cleanliness increases. 
B) air cleanliness is a public good and not a private good. 
C) the marginal utility of air cleanliness falls with the degree of cleanliness. 
D) the generation of pollution should be considered an externality. 
A) the marginal cost of air cleanliness increases. 
B) air cleanliness is a public good and not a private good. 
C) the marginal utility of air cleanliness falls with the degree of cleanliness. 
D) the generation of pollution should be considered an externality.

Question 19

Social costs are

Accepted Answer

A) private costs plus any external costs. 
B) the costs of the externality only. 
C) costs incurred when common property is used. 
D) the costs associated with reaching and enforcing agreements. 
A) private costs plus any external costs. 
B) the costs of the externality only. 
C) costs incurred when common property is used. 
D) the costs associated with reaching and enforcing agreements.

Question 20

The marginal benefit of pollution abatement is represented by

Accepted Answer

A) an upward sloping curve. 
B) a downward sloping curve. 
C) a horizontal curve. 
D) a vertical curve. 
A) an upward sloping curve. 
B) a downward sloping curve. 
C) a horizontal curve. 
D) a vertical curve.

Exam 18: Environmental Economics

The level of pollution at which the marginal benefits equal the marginal cost of cleaning up is always

Which of the following was signed in the Kyoto Protocol?

Attaining higher and higher levels of air cleanliness causes

The problem of overfishing in waters that are commonly owned can be solved by

Using a graph,show the effects of a negative externality.Where is the socially optimum point of output? How can it be achieved?

When negative externalities exist,a voluntary agreement can be negotiated.Which of the following statements is true?

Which of the following statements concerning pollution is correct?

Which of the following best describes the impact of the Emissions Trading Scheme in the European Union between 2005 and the late 2000s?

Pollution

The costs of pollution abatement

If a firm is not forced to pay for external costs,it will

Which of the following constitutes an external cost of driving an automobile?

When social costs for using a scarce resource are included,then there is

-Refer to the above figure.If the marginal cost curve for pollution abatement shifts to the right,everything considered,the

Private costs are the same as

Today,the earth has ________ of all of the species that have ever lived.

Suppose there are two firms on a river and the production processes of both require clean water.The upstream firm's process dirties the water,which it dumps back into the river.The downstream firm must clean the water before using it in its production process.If the two firms would merge,

It is assumed that the marginal benefit of air cleanliness falls with the degree of cleanliness since

Social costs are

The marginal benefit of pollution abatement is represented by

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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