Deck 6: Framework of Analysis

Question 1

The table above represents

A) a regressive outcome.
B) a progressive outcome.
C) horizontal equity.
D) vertical equity.

Answer 1

C

Question 2

During the process of risk valuation, we often use the likelihood of outcomes to calculate the __________________.

A) probability distribution
B) expected value
C) future value
D) valuation

Answer 2

B

Question 3

An environmental program is ________ if the net effect of that policy has proportionally ________ effect on low-income people as on high-income people.

A) proportional; less
B) proportional; the same
C) proportional; greater
D) progressive; the same

Answer 3

B

Question 4

The socially efficient scale maximizes the net social benefits from a project because

A) consumer preferences as revealed in market prices are maximized where MAC=MD.
B) damages are minimized where MAC=MD.
C) total abatement costs are less that total damage costs where MAC=MD.
D) net social benefits are maximized where MAC = MD.

Question 5

Risk assessment consists of several separate steps, namely:

A) exposure analysis, discount analysis, distributions analysis.
B) episodic analysis, dose-exposure analysis, community characterization.
C) exposure analysis, dose-response analysis, risk characterization.
D) emission analysis, dose-response analysis, community characterization.

Question 6

Horizontal equity treats

A) people in the same circumstances identically.
B) people in the same circumstances proportionately.
C) people in different circumstances differently.
D) none of the above.

Question 7

An environmental program is ________ if the net effect of that policy has proportionally ________ effect on low-income people as on high-income people.

A) proportional; less
B) regressive; greater
C) regressive; the same
D) regressive; lower

Question 8

An oil refinery plant has requested permission from the community to expand. The expansion is likely to increase the number of deaths in the community due to increased rates of cancer. The number of deaths and their associated probabilities is revealed in the table below: What is the expected value of 0 deaths?

A) 0
B) .8
C) .33
D) Cannot be determined.

Question 9

Cost effectiveness analysis assumes a single objective and

A) estimates the costs of competing alternative approaches to achieving that objective.
B) compares the benefits of that objective and the costs of obtaining that objective.
C) estimates the damage or effect of obtaining that objective on a valued resource.
D) compares it to the effects of other competing objectives.

Question 10

Refer to the figure above. A program that reduces emissions from the uncontrolled level of e₁ to emissions level e₂

A) reveals total costs equal to area (a+b+c+d).
B) is clearly preferable to e*, where MD=MAC.
C) yields negative net benefits because the MD curve lies above the MAC curve.
D) reveals net benefits of (a + b) - (b).

Question 11

When it comes to determining the appropriate environmental project to select, the ________ link(s) benefit-cost analysis to our theoretical model of the economics of the environment.

A) equimarginal principle
B) socially efficient scale
C) social discount rate
D) economies of scale

Question 12

An environmental program is ________ if the net effect of that policy has proportionally ________ effect on low-income people as on high-income people.

A) progressive; less
B) regressive; greater
C) progressive; higher
D) progressive; the same

Question 13

The choice of a discount rate is influenced by

A) time preference.
B) whether the effects cross generations.
C) the rate of inflation.
D) all of the above.

Question 14

There are two primary types of public environmental programs where benefit-cost analysis is typically done:

A) physical projects and regulatory programs.
B) programs initiated by the for profit sector and programs initiated by the not for profit sector.
C) fixed budget and fixed impact projects.
D) net benefit projects and sensitivity analysis projects.

Question 15

Given the information in the following table, ________ is the most cost-effective way to reduce the phosphorous concentration in the Bay of Quinte.

A) reduction in phosphorus inputs from agricultural runoff
B) alum treatment of sediments in the bay
C) tertiary treatment at sewage treatment plants
D) treatment of wastewater from water treatment plants

Question 16

A state is considering two different environmental projects that offer the net benefit streams displayed in the table below: Benefits ($) in Year:
.
Which project offers the greatest present value at a discount rate of 10%?

A) Project A
B) Project B
C) Project C
D) The projects are equal in the present value of their net benefits.

Question 17

An environmental project requires investments of $100,000 in year 1, year 2, and year 3 and yields benefits of $20,000 in year 1; $45,000 in year 2 and $150,000 in year 3. What is the net present value of the project at a discount rate of 4% (rounded to the nearest dollar)?

A) +$83,698.
B) -$84,242.
C) - $96,272.
D) None of the above.

Question 18

Vertical equity treats

A) people in the same circumstances identically.
B) people in the same circumstances proportionately.
C) people in different circumstances differently.
D) none of the above.

Question 19

Each of the following is a step in conducting a benefit-cost analysis of a project, except:

A) prepare a clear overview of the project including specifics about scale and perspective
B) estimate the social costs and benefits of the inputs and outputs of the project
C) quantitatively describe the inputs and the outputs of the program
D) all of the above are steps in benefit-cost analysis

Question 20

The 1980 Comprehensive Environmental Response, Compensation and Liability Act resulted in the US Department of Interior defining the calculation of damages to a valued resource as

A) the lost value of the resource.
B) the value of restoring the resource.
C) the value of replacing the resource with another resource.
D) the lesser of the lost value of the resource or the value of restoring the resource.

Question 21

_________ is a type of risk analysis that focuses on looking at different policy options and the levels of risk they may entail.

A) Risk-benefit analysis
B) Comparative-risk analysis
C) Risk characterization
D) Exposure analysis

Question 22

As part of an environmental risk assessment, scientists and epidemiologists engage in dose-response analysis to determine the relationship between

A) medicine and cure rates.
B) exposure and impacts.
C) pesticides and harvest.
D) benefits and costs.

Question 23

If the discount rate used in a project analysis is increased

A) net benefits will normally increase
B) net benefits will be made equal to net costs
C) net benefits will normally decrease
D) net benefits will be unaffected

Question 24

The first step in risk assessment is

A) benefit estimation
B) damage calculation
C) discounting future benefits
D) exposure analysis

Question 25

The best way to describe the results of a benefit-cost study is

A) project long-term costs
B) project net benefits
C) project long-run benefits
D) project discount rate

Question 26

In the United States, environmental impact analyses are mandated by the

A) Environmental Protection Agency (EPA).
B) Environmental Impact Agency (EIA).
C) Regulatory Impact Agency (RIA).
D) National Environmental Policy Act (NEPA).

Question 27

An oil refinery plant has requested permission from the community to expand. The expansion is likely to increase the number of deaths in the community due to increased rates of cancer. The number of deaths and their associated probabilities is revealed in the table below: What is the expected number of deaths?

A) 0
B) .8
C) .33
D) Cannot be determined.

Question 28

The 1980 Comprehensive Environmental Response, Compensation and Liability Act allows for the calculation of restoration costs in order to determine damages. Some of the difficulties of calculating restoration costs include

A) determination of the baseline resource quality.
B) the choice of alternative ways of restoring a resource in a cost-effective way.
C) the determination of a natural or environmental resource of equivalent value.
D) all of the above are difficulties with determining restoration costs.

Question 29

An analyst estimated the costs of restoring a resource to its original state. This person is doing

A) benefit-cost analysis
B) cost effectiveness analysis
C) regulatory impact analysis
D) resource damage assessment

Question 30

Cost effectiveness analysis

A) estimates the benefits and costs of a project in monetary terms
B) estimates the benefits but not the costs of projects
C) estimates the costs but not the benefits of projects
D) analyzes neither the benefits nor costs of projects