Deck 16: Protecting Safe Drinking Water

Question 1

The Drinking Water State Revolving Fund (DWSRF) was established under the original Safe Drinking Water Act of 1974.

Answer 1

False

Question 2

Standard setting under the Safe Drinking Water Act Amendments of 1996 ignores benefit-cost analysis.

Answer 2

False

Question 3

Under the American Recovery and Reinvestment Act, $2 billion was earmarked for the Drinking Water State Revolving Fund.

Answer 3

True

Question 4

The water pricing scheme that offers an economic incentive to conserve water usage is the declining block pricing structure.

Question 5

A flat fee pricing scheme for water usage is a pricing structure that is independent of water use.

Question 6

Secondary maximum contaminant levels (SMCLs) are enforceable drinking water standards that are set to protect public welfare.

Question 7

A drinking water standard based on benefit-cost analysis would be set at the point where the TSB is maximized.

Question 8

The Safe Drinking Water Act Amendments of 1996 represent the law currently in force.

Question 9

The most common pricing structure used for drinking water in the United States is the increasing block rate structure.

Question 10

U.S. primary drinking water regulations are performance-based standards.

Question 11

Each National Primary Drinking Water Regulation (NPDWR) includes a Maximum Contaminant Level Goal (MCLG), a Maximum Contaminant Level (MCL), and Best Available Technology (BAT).

Question 12

In the United States, the first law dealing with drinking water was passed in the 1920s.

Question 13

The Maximum Contaminant Level (MCL) is to be set as close to the Maximum Contaminant Level Goal (MCLG) as possible.

Question 14

The first Safe Drinking Water Act (SDWA) was passed in the 1970s.

Question 15

An established reference dose (RfD) is defined as the amount of a contaminant to which people can be exposed over a 24-hour period without harm.

Question 16

The EPA under the Obama administration devised a Drinking Water Strategy with goals that include addressing contaminants as groups instead of one at a time.

Question 17

Under U.S. law, National Primary Drinking Water Regulations (NPDWRs) have been announced for hundreds of chemicals, microorganisms, and radionuclides.

Question 18

According to available data, U.S. per capita water consumption is lower than more countries around the world.

Question 19

According to the textbook application, bottled water sold in the United States is controlled by FDA regulations.

Question 20

Under the law, priority contaminants are those that are expected to have an adverse effect on the ecology.

Question 21

Among the criteria used for identifying priority contaminants is that

A) the pollutant must occur in a private water system
B) the contaminant might have a negative effect on the ecology
C) the pollutant must be a microorganism
D) the contaminant may have an adverse effect on human health
E) none of the above

Question 22

The maximum contaminant level goals (MCLGs)

A) define the pollutant level at which no known or expected health effects arise, allowing for a margin of safety
B) are enforceable standards
C) are unrelated to the maximum contaminant levels (MCLs)
D) all of the above

Question 23

The 1986 Safe Drinking Water Act Amendments

A) reduced federal controls on drinking water
B) included a ban on lead pipe and solder in public drinking water systems
C) were proposed but never passed by Congress
D) comprise the rulings that currently govern U.S. drinking water

Question 24

According to the textbook application

A) drinking water aboard commercial aircraft is completely unregulated
B) aircraft drinking water supplies are controlled jointly by the Food and Drug Administration (FDA) and the Federal Aviation Administration (FAA)
C) random testing of aircraft drinking water in 2004 indicated that no harmful contaminants were present
D) none of the above

Question 25

The EPA formulated the Drinking Water Strategy (DWS)

A) under the Clinton administration
B) to recognize the importance of addressing contaminants one at a time
C) with four identified goals, including one to develop new drinking water technologies
D) solely to revise regulations for private well water

Question 26

Supplies of drinking water depend on

A) ground water
B) surface water
C) water resources protected by the Clean Water Act
D) all of the above
E) none of the above

Question 27

The best available technology (BAT)

A) is the treatment technology that makes attaining the MCL feasible
B) has no relationship with the MCL or the MCLG
C) is the required technology that must be used by public water suppliers
D) is part of the secondary drinking water standards

Question 28

Among the components of each NPDWR is

A) the minimum contaminant level
B) a secondary maximum contaminant level to protect public welfare
C) a National Contaminant Occurrence Database (NCOD)
D) the maximum contaminant level goal (MCLG)

Question 29

An increasing block pricing structure for water supplies

A) creates an economic incentive to conserve water usage
B) charges a higher price for lower levels of water consumption
C) does not reflect the underpinnings of benefit-cost analysis
D) ignores the marginal cost of water consumption

Question 30

According to international data,

A) U.S. per capita consumption of water is lower than in most other countries
B) water prices are generally equivalent across nations
C) European cities generally pay higher prices for water than cities in the United States
D) water prices across nations tend to defy the Law of Demand

Question 31

The National Primary Drinking Water Regulations (NPDWRs)

A) are applicable to public and private water systems
B) are to be implemented uniformly throughout the United States
C) are defined only for microorganisms
D) have been established to protect public welfare.

Question 32

The Safe Drinking Water Act Amendments of 1996

A) govern U.S. water quality today
B) established the Drinking Water State Revolving Fund (DWSRF)
C) call for setting drinking water standards that are solely benefit based
D) all of the above
E) (a) and (b) only

Question 33

According to the text application on bottled water,

A) China is the largest consumer of bottled water worldwide
B) bottled water is regulated by the rulings of the Safe Drinking Water Act
C) bottled water is not regulated in the United States
D) none of the above

Question 34

A flat fee pricing scheme for water supplies

A) is the same as a uniform rate pricing scheme
B) charges higher fees for higher water usage
C) is efficient, assuming rising marginal social cost (MSC) of water provision
D) creates an incentive to conserve water
E) none of the above

Question 35

In June 1991, the EPA announced a maximum contaminant level goal (MCLG) of zero for lead and a more stringent maximum contaminant level (MCL) of 0.015 mg/l. This new primary standard lowered the allowable lead level in drinking water from its former limit of 50 parts per billion (ppb) to 15 ppb. Because these regulations were expected to have a substantial financial impact on the regulated community — in excess of $100 million per year, they were subject to Executive Order 12291 and had to be accompanied by a Regulatory Impact Analysis (RIA). A summary of the estimated benefits and costs (stated as annualized values) from this RIA, is given below.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { BENEFITS}$
Health (based on avoided medical costs)
$\begin{array}{ll}\text { From corrosion control and source water treatment: } & \$ 2.8-\$ 4.3 \text { billion per year } \\\text { From replacement of lead service lines } & \$ 70-\$ 240 \text { million per year } \\\text { Material } & \\\text { Accruing to households and water systems } & \$ 500 \text { million per year } \\\text { Incremental Benefits } & \$ 3.4-\$ 5.0 \text { billion per year }\end{array}$

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { COSTS }$
$\begin{array}{cl}\text { Treatment, implementation, education costs }\\\text { Treatment costs: } & \$ 390-\$ 680 \text { million } \\\text { Monitoring costs: } & \$ 40 \text { million } \\\text { Education costs: } & \$ 30 \text { million } \\\text { State implementation costs: } & \$ 40 \text { million } \\\text { Incremental Costs } & \$ 500-\$ 790 \text { million per year }\end{array}$


$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { NET BENEFITS }$
$\begin{array}{lrr}&&&&\text { Net Benefits: } &&&&&&& \text {\( \$ 2.9-\$ 4.2 \) billion per year } &\\\end{array}$


-Find the PVB and PVC in real terms over a 3-year period, assuming a discount rate of 7 percent and an inflation rate of 3 percent. Use the midpoint benefit value, or $4.2 billion, and the midpoint cost value, or $645 million, for each year. Round to two decimal values for each year.
2.Based on your findings, show that the new lead standard passed the feasibility test for this three-year period.

Question 36

Suppose that the U.S. market for bottled water is modeled as follows:
S = MSC = 1 + 0.3Q D = MSB = 5 - 0.1Q,
where Q is billions of gallons per year and MSC and MSB are in dollars per gallon.
a. What is the equilibrium quantity (Q_E) and price (P_E) in the U.S. bottled water market?
b. At equilibrium price and quantity, how much total revenue will bottled water suppliers receive in a given year?
c. Assume that concerns about tap water potability increase demand for bottled water, and that the new demand (D^' ) is represented by the following:
D^' = MSB^' = 7 - 0.1Q
What is the new equilibrium quantity (Q_E' ) and price (P_E ') in the U.S. bottled water market?

Question 37

Based on your findings, show that the new lead standard passed the feasibility test for this three-year period.
Sources: U.S. Federal Register 56 (110) (June 7, 1991); U.S. EPA, Office of Water, Office of Ground Water and Drinking Water (May 1991).

Question 38

The maximum contaminant level (MCL) for a drinking water contaminant

A) is not enforceable
B) is set using benefit-cost analysis since the enactment of the 1996 SDWA amendments
C) is solely benefit based like the maximum contaminant level goals (MCLGs)
D) is set to maximize the total social benefits (TSB) of abating that contaminant

Question 39

The Drinking Water State Revolving Fund (DWSRF)

A) was established under the Safe Drinking Water Act of 1974
B) received no additional funding from the American Recovery and Reinvestment Act
C) initially authorized $1 billion per year for infrastructure improvements
D) all of the above