Question 1

Untreated raw sewage is dumped directly into rivers and oceans

Accepted Answer

A) only in less-developed economies 
B) only in rural areas 
C) only in urban areas 
D) in every large city in the United States 
E) in some of the largest U.S.cities 
A) only in less-developed economies 
B) only in rural areas 
C) only in urban areas 
D) in every large city in the United States 
E) in some of the largest U.S.cities

Question 2

If in market equilibrium the marginal social cost of producing a good exceeds the marginal private cost,

Accepted Answer

A) not enough of the product is being produced 
B) the price charged for the good is too high 
C) the good produces a positive externality 
D) the good produces a negative externality 
E) the government should produce the good 
A) not enough of the product is being produced 
B) the price charged for the good is too high 
C) the good produces a positive externality 
D) the good produces a negative externality 
E) the government should produce the good

Question 3

In Japan most garbage is

Accepted Answer

A) either recycled or burned 
B) recycled 
C) burned 
D) deposited in landfills 
E) used for fuel 
A) either recycled or burned 
B) recycled 
C) burned 
D) deposited in landfills 
E) used for fuel

Question 4

Exhibit 17-7  
-Exhibit 17-7 represents the consumer market for driving their automobiles.If drivers base their driving decisions only on the marginal private cost of driving their cars,how many miles will they drive?

Accepted Answer

A) 1,000 miles 
B) 2,000 miles 
C) 3,000 miles 
D) 4,000 miles 
E) 5,000 miles 
A) 1,000 miles 
B) 2,000 miles 
C) 3,000 miles 
D) 4,000 miles 
E) 5,000 miles

Question 5

Mountain bikers and rollerbladers share the only trail in a city park.The city allows everybody into the park and onto the trail.The mountain bikers say the rollerbladers are a hazard to them; the rollerbladers say it's the other way around.Frequently there are collisions and many injuries occur.Which of the following ways of dealing with the problem does not implicitly grant someone a property right?

Accepted Answer

A) Allow bikers to use the trail on odd-numbered days and rollerbladers to use it on even-numbered days. 
B) Allow bikers to use the trail in the morning and rollerbladers to use it in the afternoon. 
C) Allow only bikers in the park because they have invested in the more expensive sports equipment. 
D) Kick everybody out of the park. 
E) Build another trail,put rollerbladers on one and bikers on the other,and give bikers the right-of-way at intersections. 
A) Allow bikers to use the trail on odd-numbered days and rollerbladers to use it on even-numbered days. 
B) Allow bikers to use the trail in the morning and rollerbladers to use it in the afternoon. 
C) Allow only bikers in the park because they have invested in the more expensive sports equipment. 
D) Kick everybody out of the park. 
E) Build another trail,put rollerbladers on one and bikers on the other,and give bikers the right-of-way at intersections.

Question 6

Exhibit 17-1  
-In Exhibit 17-1,the socially efficient level of output is

Accepted Answer

A) 0 units 
B) 100 units 
C) between 100 and 160 units 
D) 160 units 
E) the answer cannot be determined from the information given 
A) 0 units 
B) 100 units 
C) between 100 and 160 units 
D) 160 units 
E) the answer cannot be determined from the information given

Question 7

Firms that emit toxins into the air tend to

Accepted Answer

A) underproduce because the private cost of production exceeds the social cost 
B) overproduce because the social cost of production exceeds the private cost 
C) produce the same as nonpolluting firms 
D) produce at the socially optimal amount 
E) cover pollution costs in the product's price 
A) underproduce because the private cost of production exceeds the social cost 
B) overproduce because the social cost of production exceeds the private cost 
C) produce the same as nonpolluting firms 
D) produce at the socially optimal amount 
E) cover pollution costs in the product's price

Question 8

One quarter of the prescription drugs used in the United States are derived from plants found in tropical rainforests.

Accepted Answer

A) True 
 B)False

Question 9

Most of the EPA Superfund expenditures have gone for court costs and legal fees.

Accepted Answer

A) True 
 B)False

Question 10

Which state manufactures the most toxic chemicals and has the worst toxic waste burden?

Accepted Answer

A) California 
B) Louisiana 
C) New York 
D) New Jersey 
E) West Virginia 
A) California 
B) Louisiana 
C) New York 
D) New Jersey 
E) West Virginia

Question 11

Exhibit 17-7  
-Exhibit 17-7 represents the consumer market for driving their automobiles.If drivers base their driving decisions on the marginal social cost of driving their cars,how many miles will they drive?

Accepted Answer

A) 1,000 miles 
B) 2,000 miles 
C) 3,000 miles 
D) 4,000 miles 
E) 5,000 miles 
A) 1,000 miles 
B) 2,000 miles 
C) 3,000 miles 
D) 4,000 miles 
E) 5,000 miles

Question 12

When using the economic efficiency approach to controlling air and water pollution,the government

Accepted Answer

A) forces each firm to produce emissions in the most cost efficient manner irrespective of its cost structure 
B) offers each firm the flexibility to reduce emissions in the most cost effective manner,given its unique cost structure 
C) offers each firm the option of choosing between the cost minimizing emission level and the profit maximizing emission level 
D) provides each firm with some fixed rules and then requires them to maximize profits given these fixed rules 
E) offers each firm the option of using marginal cost pricing and average cost pricing when determining the optimum emissions levels 
A) forces each firm to produce emissions in the most cost efficient manner irrespective of its cost structure 
B) offers each firm the flexibility to reduce emissions in the most cost effective manner,given its unique cost structure 
C) offers each firm the option of choosing between the cost minimizing emission level and the profit maximizing emission level 
D) provides each firm with some fixed rules and then requires them to maximize profits given these fixed rules 
E) offers each firm the option of using marginal cost pricing and average cost pricing when determining the optimum emissions levels

Question 13

To solve the common pool problem in fishing,governments can __________,or __________.

Accepted Answer

A) impose a depletion tax; prohibit resource use entirely 
B) impose a depletion tax; restrict output 
C) introduce an offsetting positive externality; prohibit resource use entirely 
D) use a variable technology; impose a depletion tax 
E) restrict output; prohibit resource use entirely 
A) impose a depletion tax; prohibit resource use entirely 
B) impose a depletion tax; restrict output 
C) introduce an offsetting positive externality; prohibit resource use entirely 
D) use a variable technology; impose a depletion tax 
E) restrict output; prohibit resource use entirely

Question 14

The optimal level of pollution occurs where the marginal social benefit is equal to

Accepted Answer

A) marginal private cost,which equals marginal social cost plus marginal external cost 
B) marginal social cost,which equals marginal private cost plus marginal external cost 
C) marginal external cost,which equals marginal private cost plus marginal social cost 
D) marginal private cost,which equals marginal social cost plus marginal internal cost 
E) marginal social cost,which equals marginal private cost plus marginal internal cost 
A) marginal private cost,which equals marginal social cost plus marginal external cost 
B) marginal social cost,which equals marginal private cost plus marginal external cost 
C) marginal external cost,which equals marginal private cost plus marginal social cost 
D) marginal private cost,which equals marginal social cost plus marginal internal cost 
E) marginal social cost,which equals marginal private cost plus marginal internal cost

Question 15

Which of the following helps explain why pesticides account for much of the water pollution in the United States?

Accepted Answer

A) Pesticide regulations were repealed during the Reagan administration. 
B) Pesticide regulations are often administered by state environmental protection agencies,not the federal Environmental Protection Agency. 
C) Pesticide regulations are administered by the federal Environmental Protection Agency,not by state agencies. 
D) Pesticide regulations are often administered by state agricultural departments rather than environmental protection agencies. 
E) Pesticide regulations are often administered by state environmental protection agencies rather than agricultural departments. 
A) Pesticide regulations were repealed during the Reagan administration. 
B) Pesticide regulations are often administered by state environmental protection agencies,not the federal Environmental Protection Agency. 
C) Pesticide regulations are administered by the federal Environmental Protection Agency,not by state agencies. 
D) Pesticide regulations are often administered by state agricultural departments rather than environmental protection agencies. 
E) Pesticide regulations are often administered by state environmental protection agencies rather than agricultural departments.

Question 16

Mountain bikers and rollerbladers share the only trail in a city park.The city allows everyone into the park and onto the trail.The mountain bikers say the rollerbladers are a hazard to them; the rollerbladers say it's the other way around.Frequently there are collisions,and many injuries occur.What is the property rights problem?

Accepted Answer

A) Rollerbladers do not have mountain bikes. 
B) Bikers do not have rollerblades. 
C) No one owns both bikes and blades. 
D) No one has property rights to the use of the trail. 
E) No one owns the park. 
A) Rollerbladers do not have mountain bikes. 
B) Bikers do not have rollerblades. 
C) No one owns both bikes and blades. 
D) No one has property rights to the use of the trail. 
E) No one owns the park.

Question 17

Property rights can be defined and enforced

Accepted Answer

A) only by the government 
B) only by ethical norms 
C) by the government and by ethical norms 
D) only through constant renegotiation 
E) by government,by informal social actions,and by ethical norms 
A) only by the government 
B) only by ethical norms 
C) by the government and by ethical norms 
D) only through constant renegotiation 
E) by government,by informal social actions,and by ethical norms

Question 18

Suppose that the city builds a new park that is advertised as being "open to the public," and within two months the grass in the park is ruined by overuse.This would be an example of

Accepted Answer

A) a nonrenewable resource 
B) a private good 
C) the common pool problem 
D) a positive externality 
E) a renewable and excludable resource 
A) a nonrenewable resource 
B) a private good 
C) the common pool problem 
D) a positive externality 
E) a renewable and excludable resource

Question 19

Robert Iwasaki lives next door to a toxic waste landfill.Katie Cooley lives five miles downstream from a steel plant that dumps waste into Mill Creek.Which person is more likely to press public officials for a cleaner environment?

Accepted Answer

A) Katie 
B) Robert 
C) neither 
D) both equally 
E) Economics cannot answer this question 
A) Katie 
B) Robert 
C) neither 
D) both equally 
E) Economics cannot answer this question

Question 20

When society receives more benefits from a good than the individuals who consume the good,

Accepted Answer

A) the marginal social benefit for the good is less than the marginal social cost 
B) too much of the good would be produced by a private market 
C) property rights are assignable and well defined 
D) the good produces a positive externality 
E) the good is exhaustible with fixed-production technology 
A) the marginal social benefit for the good is less than the marginal social cost 
B) too much of the good would be produced by a private market 
C) property rights are assignable and well defined 
D) the good produces a positive externality 
E) the good is exhaustible with fixed-production technology

Exam 19: Externalities and the Environment

Untreated raw sewage is dumped directly into rivers and oceans

If in market equilibrium the marginal social cost of producing a good exceeds the marginal private cost,

In Japan most garbage is

Exhibit 17-7 -Exhibit 17-7 represents the consumer market for driving their automobiles.If drivers base their driving decisions only on the marginal private cost of driving their cars,how many miles will they drive?

Exhibit 17-1 -In Exhibit 17-1,the socially efficient level of output is

Firms that emit toxins into the air tend to

One quarter of the prescription drugs used in the United States are derived from plants found in tropical rainforests.

Most of the EPA Superfund expenditures have gone for court costs and legal fees.

Which state manufactures the most toxic chemicals and has the worst toxic waste burden?

Exhibit 17-7 -Exhibit 17-7 represents the consumer market for driving their automobiles.If drivers base their driving decisions on the marginal social cost of driving their cars,how many miles will they drive?

When using the economic efficiency approach to controlling air and water pollution,the government

To solve the common pool problem in fishing,governments can __________,or __________.

The optimal level of pollution occurs where the marginal social benefit is equal to

Which of the following helps explain why pesticides account for much of the water pollution in the United States?

Property rights can be defined and enforced

Suppose that the city builds a new park that is advertised as being "open to the public," and within two months the grass in the park is ruined by overuse.This would be an example of

Robert Iwasaki lives next door to a toxic waste landfill.Katie Cooley lives five miles downstream from a steel plant that dumps waste into Mill Creek.Which person is more likely to press public officials for a cleaner environment?

When society receives more benefits from a good than the individuals who consume the good,

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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To solve the common pool problem in fishing,governments can ,or .