Question 1

Centrally planned economies like China produce relatively little pollution.

Accepted Answer

A) True 
 B)False

Question 2

Taxes on emissions have

Accepted Answer

A) led to firms discovering costless methods of extraction of pollutants from liquid discharges. 
B) led to increased waste disposal of pollutants. 
C) led to voluntary reduction in emissions to avoid the taxes. 
D) not been an efficient penalty.Firms continue to pollute.

Question 3

What is not true for a system of financial penalties for polluters?

Accepted Answer

A) Firms may be fined for pollution. 
B) Firms might have to pay a tax for each unit of pollution created. 
C) Firms would be encouraged to pollute less. 
D) Firms are always guaranteed the permit to pollute.

Question 4

China, the last large communist society,

Accepted Answer

A) has proved that a command economy has far less pollution problems than capitalist economies. 
B) has urban smog levels higher than Los Angeles. 
C) has the world's most sophisticated pollution-control devices. 
D) has lowered its level of pollution dramatically since 1980.

Question 5

Economists generally prefer to deal with emissions of pollutants

Accepted Answer

A) with direct controls. 
B) by encouraging people not to pollute. 
C) by subsidizing the installation of pollution-control equipment. 
D) by taxing emissions.

Question 6

Environmentalists, politicians, and economists have different perspectives on what constitutes appropriate environmental policy.Which of the following statements was probably made by an economist?

Accepted Answer

A) "We take the position that there are rights involved here, rights to be protected from threats to your health, regardless of the costs involved." 
B) "Protecting the environment is so important that standards cannot be too high, and continuing improvements must be made regardless of cost." 
C) "Pollution is a moral issue that cannot be reduced to dollars and cents." 
D) "Clean air and water are things we can buy-if the price is right."

Question 7

Under an emissions tax program, the government sets ____; under an emissions permits program, the government sets ____.

Accepted Answer

A) the price of the right to pollute; the price of the right to pollute 
B) the price of the right to pollute; the permitted total quantity of pollution 
C) the permitted total quantity of pollution; the price of the right to pollute 
D) the permitted total quantity of pollution; the permitted total quantity of pollution

Question 8

The advantages of emissions permits over taxes is/are that

Accepted Answer

A) it increases uncertainty about the quantity of pollution that will be emitted. 
B) environmental authorities decide on an emissions ceiling in advance of issuing permits. 
C) pollutants can be raised to levels that have adverse effects on health. 
D) firms whose marginal cost of reducing emissions are lower than the market price of permits will find it more profitable to buy additional permits than to reduce their emissions.

Question 9

Economists consider environmental pollution to be a(n)

Accepted Answer

A) externality. 
B) pure public good. 
C) allocatively efficient outcome. 
D) public interest outcome.

Question 10

Voluntarism includes methods for dealing with pollution that

Accepted Answer

A) carry no legal authority. 
B) assume the public has been made aware of the environmental damage they are responsible for. 
C) involve trying to coerce polluters to reduce or eliminate pollution voluntarily. 
D) rely on neighborhood vigilantism.

Question 11

Many economists argue that the most efficient way to control pollution is to

Accepted Answer

A) ban all activities that create pollution. 
B) enforce legal standards on air and water quality. 
C) promote environmental awareness among citizens. 
D) impose taxes on emissions.

Question 12

Increasing environmental awareness in the United States has occurred with increasing GDP, which has reduced concerns about basic needs.

Accepted Answer

A) True 
 B)False

Question 13

New discoveries of lead, zinc, and copper will reduce prices.

Accepted Answer

A) True 
 B)False

Question 14

Pollution taxes are more efficient in cleaning up the environment than direct controls.What is not an advantage of direct controls?

Accepted Answer

A) They are useful standby mechanisms. 
B) They are useful if it is decided to prohibit the substance altogether. 
C) They are useful where dependable metering devices are not available or prohibitively costly to install. 
D) They are most useful in centrally planned economies.

Question 15

By providing free garbage removal, a community

Accepted Answer

A) discourages activities that produce detrimental externalities. 
B) disincentivizes citizens from recycling. 
C) leads citizens to throw out less garbage than is socially optimal. 
D) raises the opportunity cost of recycling.

Question 16

Direct controls are generally much more costly than emissions taxes because

Accepted Answer

A) under direct controls emissions cutbacks are usually not apportioned among the firms on the basis of their ability to reduce pollution cheaply and efficiently. 
B) emissions tax per unit of output is higher than the per-unit direct control program cost. 
C) government cannot legally levy emissions taxes that are as high. 
D) firms disregard emissions taxes.

Question 17

The share of the burden of an emissions tax on output borne by the consumer of the polluting output will rise as

Accepted Answer

A) the tax rises. 
B) demand elasticity falls. 
C) demand elasticity rises. 
D) the tax falls.

Question 18

Direct controls often require long legal proceedings before they can be effective.

Accepted Answer

A) True 
 B)False

Question 19

Economic theory posits that a resource that is finite and being depleted will rise in price continuously and demand will be reduced.In fact, a recent study, graphing the price behavior of lead, zinc, and copper found that until about 2007,

Accepted Answer

A) prices rose steadily, as predicted. 
B) prices dropped precipitously. 
C) prices remained remarkably stable. 
D) prices were up and down with no discernible pattern.

Question 20

Direct controls

Accepted Answer

A) have not been tried in practice, but work in theory. 
B) have been the main instrument used by the United States when dealing with polluting activities. 
C) achieve more success than pollution charges. 
D) achieve more success than pollution allowances.

Exam 16: The Economics of the Environment, and Natural Resources

Centrally planned economies like China produce relatively little pollution.

Taxes on emissions have

What is not true for a system of financial penalties for polluters?

China, the last large communist society,

Economists generally prefer to deal with emissions of pollutants

Environmentalists, politicians, and economists have different perspectives on what constitutes appropriate environmental policy.Which of the following statements was probably made by an economist?

Under an emissions tax program, the government sets ; under an emissions permits program, the government sets .

The advantages of emissions permits over taxes is/are that

Economists consider environmental pollution to be a(n)

Voluntarism includes methods for dealing with pollution that

Many economists argue that the most efficient way to control pollution is to

Increasing environmental awareness in the United States has occurred with increasing GDP, which has reduced concerns about basic needs.

New discoveries of lead, zinc, and copper will reduce prices.

Pollution taxes are more efficient in cleaning up the environment than direct controls.What is not an advantage of direct controls?

By providing free garbage removal, a community

Direct controls are generally much more costly than emissions taxes because

The share of the burden of an emissions tax on output borne by the consumer of the polluting output will rise as

Direct controls often require long legal proceedings before they can be effective.

Economic theory posits that a resource that is finite and being depleted will rise in price continuously and demand will be reduced.In fact, a recent study, graphing the price behavior of lead, zinc, and copper found that until about 2007,

Direct controls