Deck 23: Natural Resources, the Environment, and Climate Change

Question 1

The wood in a forest would be considered a

A)limited natural resource.
B)renewable natural resource.
C)sequestered natural resource.
D)sustainable natural resource.

Answer 1

B

Question 2

In Figure 23.1 for a good with no externality, which area represents consumer surplus to the consumer?

A)AP*C
B)0ACQ*
C)0BCQ*
D)0P*CQ*

Answer 2

A

Question 3

The optimal resource use for a limited natural resource very much depends on the

A)discount rate you apply to the use to future limited natural resources.
B)place from where it is harvested.
C)incomes of those who will benefit from its use.
D)relative cost of extracting that resource relative to a substitute.

Answer 3

A

Question 4

A person using a discount rate or 0% is going to consider the concept of sustainability

A)as wise.
B)as unwisely focusing on the present.
C)as overly weighting the future.
D)just a fancy term oil and gas companies use to argue for increased rights to drill.

Question 5

The act of weighing the long run use of limited natural resources is called

A)stewardship.
B)gamesmanship.
C)brinksmanship.
D)fostering.

Question 6

In Figure 23.1 for a good with no externality, which area represents the total value to the consumer?

A)0ACQ*
B)BP*C
C)0BCQ*
D)0P*CQ*

Question 7

Pollution is an example of a

A)negative externality.
B)positive externality.
C)neutral externality.
D)golden externality.

Question 8

Economists assume that late in the process of cleaning a dirty environment there are relatively

A)high benefit-low cost things than could and should be saved for last.
B)high benefit-high cost things than could and should be saved for last.
C)low benefit-low cost things than could and should be saved for last.
D)low benefit-high cost things than could and should be saved for last.

Question 9

Iron ore would be considered a

A)limited natural resource.
B)renewable natural resource.
C)sequestered natural resource.
D)sustainable natural resource.

Question 10

The concept of "clean enough" to an economist means the

A)perfect state of cleanliness.
B)state of cleanliness where the average cost of cleaning more equals the average benefit of cleaning more.
C)state of cleanliness where the marginal cost of cleaning equals the marginal benefit of cleaning.
D)state of cleanliness where the total cost of cleaning equals the total benefit of cleaning.

Question 11

The fish in the ocean would be considered a

A)limited natural resource.
B)renewable natural resource.
C)sequestered natural resource.
D)sustainable natural resource.

Question 12

Economists assume that early in the process of cleaning a dirty environment there are relatively

A)high benefit-low cost things than can and should be done first.
B)high benefit-high cost things than can and should be done first.
C)low benefit-low cost things than can and should be done first.
D)low benefit-high cost things than can and should be done first.

Question 13

Crude oil would be considered a

A)limited natural resource.
B)renewable natural resource.
C)sequestered natural resource.
D)sustainable natural resource.

Question 14

The optimal resource use for a limited natural resource is

A)more front loaded with a higher discount rate.
B)more back loaded with a higher discount rate.
C)unrelated to the discount rate.
D)more likely to be u-shaped with a higher interest rate.

Question 15

A person using a high discount rate is going to consider the concept of sustainability

A)as wise.
B)as unwisely focusing on the present.
C)as overly weighting the future.
D)just a fancy term oil and gas companies use to argue for increased rights to drill.

Question 16

In Figure 23.1 for a good with no externality, which area represents the total variable cost to the producer?

A)OACQ*
B)BP*C
C)0BCQ*
D)0P*CQ*

Question 17

Natural gas would be considered a

A)limited natural resource.
B)renewable natural resource.
C)sequestered natural resource.
D)sustainable natural resource.

Question 18

The optimal resource use for a limited natural resource is

A)more front loaded with a higher discount rate.
B)more back loaded with a higher discount rate.
C)unrelated to the discount rate.
D)more likely to be u-shaped with a higher interest rate.

Question 19

Suppose an ardent environmentalist sought to preserve limited natural resources for future generations, she would, more than likely be arguing that oil and gas companies use an inappropriately

A)high discount rate when considering optimal resource use.
B)low discount rate when considering optimal resource use.
C)decreasing discount rate when considering optimal resource use.
D)flat discount rate when considering optimal resource use.

Question 20

Sustainability requires that

A)renewable natural resources be used only at a rate at which they can be replaced.
B)limited natural resources be used as sparingly as possible.
C)gamesmanship.
D)Both gamesmanship and renewable natural resources be used only at a rate at which they can be replaced.

Question 21

In Figure 23.1 for a good with no externality, which area represents the total revenue to the producer?

A)AP*C
B)BP*C
C)0BCQ*
D)0P*CQ*

Question 22

By most standards of clean air and water published from government sources, the environment is ______ than it was in 1975.

A)much cleaner (more than 25% by most measures)
B)much dirtier (more than 25% by most measures)
C)somewhat dirtier (1-5% by most measures)
D)somewhat clearer (1-5% by most measures)

Question 23

In Figure 23.1 for a good with no externality, which area represents the total revenue to the producer?

A)0ACQ*
B)BP*C
C)0BCQ*
D)0P*CQ*

Question 24

External costs are modeled by creating a new social cost curve that is

A)lower than the original supply curve.
B)higher than the original supply curve.
C)lower than the original demand curve.
D)higher than the original demand curve.

Question 25

In Figure 23.1 for a good with no externality, which area represents the producer surplus?

A)ABC
B)BP*C
C)0BCQ*
D)0P*CQ*

Question 26

If logging companies are allowed to harvest on public lands, economists use present value analysis to suggest that logging companies will

A)harvest all they can as quickly as the can.
B)leave the young trees for later.
C)harvest only the prettiest trees.
D)leave only the taller trees.

Question 27

Which of the following would economists label as an example of the "tragedy of the commons?"

A)The over grazing of private land by ranchers.
B)The over grazing of public land by ranchers.
C)The disregard for health warnings on home use pesticide sprays.
D)The loss of value that a homeowner incurs when they fail to maintain their lawn.

Question 28

According to Nobel laureate economist Ronald Coase, if a person lives near a neighborhood park and a storm uproots several trees around the neighborhood, people will naturally

A)work to repair their own private damage first.
B)pay for someone to work on their own private property and pitch in to help on the park.
C)work on the public park first.
D)ignore the entire problem.

Question 29

After accounting for externalities with a social cost curve, the new equilibrium would be such that equilibrium price is

A)lower than before and equilibrium quantity is higher than before.
B)higher than before and equilibrium quantity is higher than before.
C)lower than before and equilibrium quantity is lower than before.
D)higher than before and equilibrium quantity is lower than before.

Question 30

A key element in an economist's analysis of whether a company is making rational decisions with regard to their exploitation of a natural resource is the notion of

A)sentimental value.
B)present value.
C)ignored value.
D)created value.

Question 31

The Environmental Protection Agency was created in

A)the 1930's.
B)the 1960's.
C)the 1980's.
D)the 1990's.

Question 32

Which of the following would economists label as an example of the "tragedy of the commons?"

A)The use of pesticides on private farm land.
B)The use of growth hormone on cattle.
C)The over-fishing of the oceans.
D)The neighbor who does not mow his yard.

Question 33

Lead in the air is _____ than its 1975 level.

A)99% less
B)3% less
C)3% more
D)97% more

Question 34

Sulfur dioxide in the air is _____ than its 1975 level.

A)84% less
B)8% less
C)8% more
D)40% more

Question 35

Economists refer to the problem that exists when public property is treated poorly because it is in no one's private interest to protect it as the

A)tragedy of capitalism.
B)tragedy of the commons.
C)Achilles' heel of socialism.
D)mistake of zoning.

Question 36

Using present value analysis, an economist will argue that we do not have to worry about loggers harvesting young trees on private land.

A)Because it is more profitable for them to let the young trees grow.
B)Because it is not profitable for them to engage in any logging.
C)Because logging companies do not attempt to maximize profit.
D)Because young tree have no market value.

Question 37

The economic explanation that is given by Nobel laureate economist Ronald Coase for why community property is polluted more often that private property is that

A)damaging community property indirectly affects individuals' wealth whereas damaging private property directly affects their wealth.
B)damaging private property indirectly affects individuals' wealth whereas damaging community property directly affects their wealth.
C)people are not made aware of their actions toward community property.
D)people ignore what is not right in front of them.

Question 38

In Figure 23.1 for a good with no externality, which area represents the net benefit to society of this market?

A)0ACQ*
B)ABC
C)BP*C
D)0P*CQ*

Question 39

Nobel laureate economist Ronald Coase suggests that pollution problems could be solved if

A)people used a community spirit rather than a self-interested motive when making decisions.
B)community property was owned by self-interested parties.
C)community property was made the norm.
D)people simply thought about the costs of their actions.

Question 40

The Clean Air Act and the Clean Water Act were originally passed in

A)the 1930's.
B)the 1960's.
C)the 1970's.
D)the 1990's.

Question 41

Setting taxes equal to marginal external costs are modeled by creating a new social cost curve that is

A)lower than the original supply curve.
B)higher than the original supply curve.
C)lower than the original demand curve.
D)higher than the original demand curve.

Question 42

A tax on a good whose production causes pollution will

A)raise the equilibrium price and lower the equilibrium quantity.
B)lower the equilibrium price and lower the equilibrium quantity.
C)raise the equilibrium price and raise the equilibrium quantity.
D)lower the equilibrium price and raise the equilibrium quantity.

Question 43

Global environmental problems are less easily solved than those confined to a single country because

A)a single country has no incentive to solve global problems.
B)there is no worldwide interest in solving global problems.
C)there is no effective enforcement mechanism available for solving global problems.
D)all of the options are correct.

Question 44

The Endangered Species Act was originally passed in

A)the 1930's.
B)the 1970's.
C)the 1980's.
D)the 1990's.

Question 45

If it costs Con Ed approximately $20 per additional ton of air pollution abated, but it costs PG&E only $10 per additional ton of air pollution abated, a marketable pollution permit trading for $14 per ton could

A)save PG&E $4 per ton and earn Con Ed $6 per ton.
B)earn PG&E $4 per ton and save Con Ed $6 per ton.
C)save PG&E $6 per ton and earn Con Ed $4 per ton.
D)earn PG&E $6 per ton and save Con Ed $4 per ton.

Question 46

A tax on a polluting activity could internalize the externality if it were set equal to the

A)average cost of the pollution.
B)marginal cost of the pollution.
C)total cost of the pollution.
D)moral cost of the pollution

Question 47

Economists see the greenhouse effect as

A)having both negative and positive economic impacts.
B)having only positive economic consequences.
C)having only negative economic consequences.
D)having no economic consequences.

Question 48

Which issue type of environmental problem is least easily solved?

A)One that is entirely confined to a single property owned by an individual.
B)One that is entirely confined to a single community.
C)One that is entirely confined to a single country.
D)One that is global.

Question 49

Which of the following environmental problems is among the least easily solved?

A)waste water treatment
B)a nation's air pollution issues
C)a nation's coastal water pollution issues
D)the world's global warming issues

Question 50

Economists generally believe that

A)free market activity cannot coexist with a clean environment.
B)regulation is the only effective way to reduce pollution.
C)private incentives can be used to motivate individuals to act "green".
D)Both free market activity cannot coexist with a clean environment and regulation is the only effective way to reduce pollution.

Question 51

The average global temperature rose

A)1 degree F in the last 100 years.
B)3-5 degrees F in the last 100 years.
C)15 degrees F in the last 100 years.
D)3-5 degrees in the last 10 years.

Question 52

Tradable emission permits

A)allow polluters to keep polluting while paying no price.
B)prevent industries from polluting regardless of how beneficial their goods are to society.
C)encourage polluting companies to look at the value of reducing pollution just as they look at the value of increased production.
D)do nothing to increase efficiency.

Question 53

The Endangered Species Act has

A)succeeded in that there are no endangered species to be concerned about in the US.
B)succeeded marginally in that 33 of the more than 1200 endangered species now have stable populations.
C)failed in that no species of plant or animal is better off now than when the law was passed.
D)made things worse because it allows more species to become extinct.

Question 54

The price of tradable emission permits for sulfur dioxide

A)has steadily increased since 1992.
B)has steadily decreased since 1992.
C)remained almost totally unchanged since 1992.
D)was set at a specific price in 1992 and cannot change without a new law.

Question 55

Which of the following environmental problems is among the most easily solved?

A)waste water treatment
B)a nation's air pollution issues
C)a nation's coastal water pollution issues
D)the world's global warming issues

Question 56

The Clean Air Act of 1992 focused on

A)greenhouse gases.
B)acid rain.
C)the ozone layer.
D)smog.

Question 57

The average temperature is supposed to rise

A)1 degree F in the next 100 years.
B)3-5 degrees F in the next 100 years.
C)15 degrees F in the next 100 years.
D)3-5 degrees in the next 10 years.

Question 58

If it costs Con Ed approximately $20 per additional ton of air pollution abated, but it costs PG&E only $10 per additional ton of air pollution abated and a marketable pollution permit trades for $14 per ton,

A)PG&E could gain by selling and Con Ed could gain by buying.
B)PG&E could gain by buying and Con Ed could gain by selling.
C)both PG&E and Con Ed could gain by buying.
D)both PG&E and Con Ed could gain by selling.

Question 59

The Clean Water Act has

A)succeeded in getting every body of water in the U.S. to acceptably clean levels.
B)succeeded in getting no body of water in the U.S. to acceptably clean levels.
C)succeeded in getting many bodies of water in the US to acceptably clean levels.
D)made things worse because more bodies of water are unsafe now than before the law was passed.

Question 60

Carbon monoxide in the air is _____ than its 1975 level.

A)67% less
B)3% less
C)3% more
D)25% more

Question 61

If it costs Con Ed approximately $26 per additional ton of air pollution abated, but it costs PG&E only $18 per additional ton of air pollution abated, the two companies could both benefit from trading a marketable pollution permit at any price between

A)$0 per ton and $18 per ton.
B)$0 per ton and $26 per ton.
C)$18 per ton and $26 per ton.
D)$26 per ton and $36 per ton.

Question 62

The Kyoto Protocols were initially

A)approved by the U.S. Senate and signed by President Clinton
B)approved by the U.S. Senate but never signed by President Clinton
C)signed by President Clinton but never approved by the U.S. Senate
D)approved by President Bush

Question 63

Compared to the situation existing when the Kyoto Protocols were created,

A)India actually produces less greenhouse gasses (GHG)
B)the U.S. Senate finally approved the treaty under pressure from President Bush
C)the U.S. is producing less greenhouse gasses (GHG)than it had promised
D)China produces two and one-half times more greenhouse gasses (GHG)

Question 64

The Trump Administration is likely to

A)continue the Obama Administration's policies toward greenhouse gas (GHG)regulation
B)alter the U.S. government's position toward greenhouse gas (GHG)regulation
C)withdraw the U.S. from the Paris Accord negotiations
D)resist pressure from the American people for approval of the Kyoto Protocols

Question 65

Applying the concept of "clean enough" to clean water an economist means the

A)perfectly clean water.
B)state of cleanliness where the average cost of cleaning more equals the average benefit of cleaning more.
C)state of cleanliness where the marginal cost of cleaning equals the marginal benefit of cleaning.
D)state of cleanliness where the total cost of cleaning equals the total benefit of cleaning.

Question 66

Applying the concept of "clean enough" to endangered species an economist means the

A)No species are ever harmed.
B)state of species endangerment where the average cost of cleaning more equals the average benefit of cleaning more.
C)state of species endangerment where the marginal cost of cleaning equals the marginal benefit of cleaning.
D)state of species endangerment where the total cost of cleaning equals the total benefit of cleaning.

Question 67

If it costs Con Ed approximately $20 per additional ton of air pollution abated, but it costs PG&E only $10 per additional ton of air pollution abated and a marketable pollution permit trades for $14 per ton,

A)PG&E could gain by buying and Con Ed could gain by selling.
B)society would gain if PG&E would sell and Con Ed would buy.
C)both PG&E and Con Ed could gain by buying.
D)both PG&E and Con Ed could gain by selling.

Question 68

Elimination of the current 13% overproduction of greenhouse gasses (GHG)by the U.S.

A)can be achieved by encouraging American drivers to be more considerate of poorer nations
B)might require a substantial per gallon increase in the price of gasoline in the U.S.
C)is likely to be achieved almost painlessly as the Baby Boomers retire
D)can be achieved by repealing the current federal excise tax on gasoline

Question 69

Compared to the situation existing when the Kyoto Protocols were created,

A)India produces twice as much greenhouse gasses (GHG)
B)the U.S. Senate finally approved the treaty under pressure from President Bush
C)the U.S. is producing less greenhouse gasses (GHG)than it had promised
D)China actually produces less greenhouse gasses (GHG)

Question 70

The Obama Administration's proposed environmental policy of "Cap and Trade" would have

A)freely issued unlimited rights to pollute, while taxing polluters for every ton of emissions.
B)taxed polluters for every ton of emissions, to subsidize their adoption of "green" technologies.
C)limited the total amount of pollution allowed, while prohibiting exchange of rights to pollute.
D)limited the total amount of pollution allowed, while permitting exchange of rights to pollute.

Question 71

Applying the concept of "clean enough" to clean air an economist means the

A)perfectly clean water.
B)state of cleanliness where the average cost of cleaning more equals the average benefit of cleaning more.
C)state of cleanliness where the marginal cost of cleaning equals the marginal benefit of cleaning.
D)state of cleanliness where the total cost of cleaning equals the total benefit of cleaning.

Question 72

A system of tradable air pollution permits has the advantage of

A)reducing the total amount of air pollution.
B)eliminating all environmental liability for participating polluters.
C)rewarding efficient abatement effort at the expense of inefficient abatement efforts.
D)ensuring that the goal amount of abatement occurs at the lowest social cost.

Question 73

Applying the concept of "clean enough" to climate change, an economist means the

A)A restoration of the climate to its pre-industrial state without regard to the consequences.
B)A reversal of climate change such that the average cost of the restoration equals the average benefit of the restoration.
C)A slowing down or reversal of climate change such that the marginal cost of the effort equals the marginal benefit of the effort.
D)A slowing down or reversal of climate change such that the total cost of the effort equals the total benefit of the effort.