Question 1

____ has(have)traditionally been the chief instrument of environmental policy in the United States.

Accepted Answer

A) Taxes on pollution 
B) Voluntary compliance 
C) Tradable emissions permits 
D) Direct controls

Question 2

Increasing GDP generally causes increases in problems of waste disposal.

Accepted Answer

A) True 
 B)False

Question 3

Voluntarism includes methods for dealing with pollution that

Accepted Answer

A) carry no legal authority. 
B) call the problems of pollution to the public's attention. 
C) involve trying to persuade polluters to reduce or eliminate pollution voluntarily. 
D) include all of the above.

Question 4

Supply and demand analysis

Accepted Answer

A) can be used to understand solutions to pollution, but not causes. 
B) can be used to analyze how externalities lead to environmental problems. 
C) cannot be used to analyze pollution, which is a physical and chemical problem. 
D) cannot be used to solve the pollution problem, but can be used to analyze it.

Question 5

Which of the following could be called a virtue of raising prices of depletable resources?

Accepted Answer

A) It would discourage consumption and waste. 
B) It would stimulate more efficient use of resources. 
C) It would encourage innovation and discovery of alternatives. 
D) All of the above are true.

Question 6

Global warming of the past century,and especially in the past decade,is at least partly a consequence of human activities that have increased ____ in the atmosphere.

Accepted Answer

A) smog 
B) PCBs 
C) ozone 
D) "greenhouse gases"

Question 7

In the last three decades,air quality in American cities has improved.

Accepted Answer

A) True 
 B)False

Question 8

Compare market price and quantity of steel to socially optimal price and quantity if steel producers ignore soot emitted from their smokestacks.Use a graph to assist your explanation.

Accepted Answer

The answer of Compare market price and quantity of steel...

Question 9

Voluntary programs,direct controls,and emissions taxes are all equally effective ways of controlling pollution.

Accepted Answer

A) True 
 B)False

Question 10

According to economic theory,under perfect competition,the price of a depletable resource whose costs of transportation and extraction are negligible

Accepted Answer

A) is a poor indicator of scarcity. 
B) must rise at the rate of interest. 
C) will be unable to change to avert running out of it. 
D) is too erratic to allow markets to respond to shortages.

Question 11

Rising prices of resources leads to inefficient resource use by industry.

Accepted Answer

A) True 
 B)False

Question 12

Detrimental externalities like pollution are a shortcoming of the market mechanism.Do they occur in free market economies alone? Explain with examples.

Accepted Answer

The answer of Detrimental externalities like pollution are a shortcoming...

Question 13

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 14

Following the sharp increases in oil prices in the United States caused by the OPEC oil embargo of 1973-1974,U.S.automakers started building smaller,more fuel-efficient cars.This development caused the

Accepted Answer

A) demand curve for oil to shift out. 
B) demand curve for oil to shift in. 
C) supply curve of oil to shift out. 
D) supply curve of oil to shift in.

Question 15

Environmental quality is

Accepted Answer

A) a public good. 
B) best improved through government's prohibiting externalities. 
C) maximized when costs of pollution are external. 
D) minimized when optimal levels of pollution are produced.

Question 16

The observed change in the reserves of copper,lead,and zinc between 1960 and 1990 was most likely caused by

Accepted Answer

A) low prices discouraging exploration for new reserves. 
B) a slowdown in demand growth. 
C) high prices that stimulated exploration. 
D) the discovery of substitutes.

Question 17

Regulations that strictly limit pollution

Accepted Answer

A) provide firms no incentives to reduce pollution once a standard is met. 
B) provide incentives for firms to discover loopholes in the regulations. 
C) tend to be economically inefficient ways to reduce pollution. 
D) All of the above are true.

Question 18

If coal prices are rising faster than the rate of interest,then

Accepted Answer

A) investors should buy coal instead of bonds. 
B) investors should buy bonds instead of coal. 
C) coal prices should be expected to fall. 
D) bond prices should be expected to rise.

Question 19

Most economists agree that exclusive reliance on direct controls

Accepted Answer

A) is a sound approach. 
B) has worked well for us in the past. 
C) is cheaper than any other enforcement mechanism. 
D) is a mistake.

Question 20

Emissions permits are sometimes referred to as a "license to pollute."

Accepted Answer

A) True 
 B)False

Exam 17: Externalities, the Environment, and Natural Resources

____ has(have) traditionally been the chief instrument of environmental policy in the United States.

Increasing GDP generally causes increases in problems of waste disposal.

Voluntarism includes methods for dealing with pollution that

Supply and demand analysis

Which of the following could be called a virtue of raising prices of depletable resources?

Global warming of the past century,and especially in the past decade,is at least partly a consequence of human activities that have increased ____ in the atmosphere.

In the last three decades,air quality in American cities has improved.

Compare market price and quantity of steel to socially optimal price and quantity if steel producers ignore soot emitted from their smokestacks.Use a graph to assist your explanation.

Voluntary programs,direct controls,and emissions taxes are all equally effective ways of controlling pollution.

According to economic theory,under perfect competition,the price of a depletable resource whose costs of transportation and extraction are negligible

Rising prices of resources leads to inefficient resource use by industry.

Detrimental externalities like pollution are a shortcoming of the market mechanism.Do they occur in free market economies alone? Explain with examples.

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

Following the sharp increases in oil prices in the United States caused by the OPEC oil embargo of 1973-1974,U.S.automakers started building smaller,more fuel-efficient cars.This development caused the

Environmental quality is

The observed change in the reserves of copper,lead,and zinc between 1960 and 1990 was most likely caused by

Regulations that strictly limit pollution

If coal prices are rising faster than the rate of interest,then

Most economists agree that exclusive reliance on direct controls

Emissions permits are sometimes referred to as a "license to pollute."