Question 1

Environmental destruction is peculiar to centrally planned economies.

Accepted Answer

A) True 
 B)False

Question 2

Many of the new pollutants to which the world has been subjected are

Accepted Answer

A)  less visible. 
B)  less malodorous. 
C)  far more dangerous. 
D)  All of the above are correct. 
A)  less visible. 
B)  less malodorous. 
C)  far more dangerous. 
D)  All of the above are correct.

Question 3

Rising prices will discourage consumption and encourage conservation.

Accepted Answer

A) True 
 B)False

Question 4

Explain why environmentally minded firms in a competitive industry will find it difficult to take environmental action.

Accepted Answer

Firms can survive in competition only if

Question 5

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. 
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 6

Taking advantage of the built-in-loophole in emission taxes implies

Accepted Answer

A)  opportunity to save on taxes by reducing emissions. 
B)  opportunity to avoid taxes even without cutting emissions. 
C)  opportunity to increase emission by paying more tax. 
D)  opportunity to pay less by increasing emission. 
A)  opportunity to save on taxes by reducing emissions. 
B)  opportunity to avoid taxes even without cutting emissions. 
C)  opportunity to increase emission by paying more tax. 
D)  opportunity to pay less by increasing emission.

Question 7

Which of the following is most likely to reduce the consumption of an exhaustible natural resource?

Accepted Answer

A)  a decrease in monopoly control of the market for the resource 
B)  government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource 
C)  implementation of a price ceiling for the resource below its equilibrium price 
D)  government macroeconomic policies that lower the interest rate on bonds 
A)  a decrease in monopoly control of the market for the resource 
B)  government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource 
C)  implementation of a price ceiling for the resource below its equilibrium price 
D)  government macroeconomic policies that lower the interest rate on bonds

Question 8

Price controls on resources generally lead to surpluses.

Accepted Answer

A) True 
 B)False

Question 9

Pollution is a relatively new phenomenon.

Accepted Answer

A) True 
 B)False

Question 10

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. 
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 11

Economists believe it is feasible and desirable to reduce environmental damage to zero.

Accepted Answer

A) True 
 B)False

Question 12

The increase in world oil prices during the 1970s was

Accepted Answer

A)  the result of depletion of world reserves of oil. 
B)  artificially created by OPEC. 
C)  the result of extremely high growth rates in industrialized countries. 
D)  fully reversed by 1982. 
A)  the result of depletion of world reserves of oil. 
B)  artificially created by OPEC. 
C)  the result of extremely high growth rates in industrialized countries. 
D)  fully reversed by 1982.

Question 13

Voluntarism as an approach to environmental problems

Accepted Answer

A)  has no place at all in solving the problems. 
B)  is quite successful in reducing pollution. 
C)  is more effective than first meets the eye. 
D)  often has proved weak and unreliable. 
A)  has no place at all in solving the problems. 
B)  is quite successful in reducing pollution. 
C)  is more effective than first meets the eye. 
D)  often has proved weak and unreliable.

Question 14

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

Question 15

Pollution is an example of a negative externality.

Accepted Answer

A) True 
 B)False

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. 
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

The pricing system has a failure built into it when externalities exist.

Accepted Answer

A) True 
 B)False

Question 18

Recycling in the United States in recent years

Accepted Answer

A)  has decreased in spite of increased fees for dumping trash. 
B)  has remained unchanged, and increased fees for dumping may help. 
C)  has increased with increased fees for dumping trash. 
D)  has increased with no help from increased fees for dumping trash. 
A)  has decreased in spite of increased fees for dumping trash. 
B)  has remained unchanged, and increased fees for dumping may help. 
C)  has increased with increased fees for dumping trash. 
D)  has increased with no help from increased fees for dumping trash.

Question 19

Briefly and concisely define the following terms.
a.voluntarism
b.direct controls
c.depletable resource

Accepted Answer

a.Voluntarism refers to a number of nonm

Question 20

The use of pollution charges to reduce pollution confronts the problem of

Accepted Answer

A)  free riders who avoid revealing benefits from abatement. 
B)  determining specific individual damages and appropriate charges associated with pollutants. 
C)  necessarily lowering the price of the products. 
D)  requiring no agency to administer the tax. 
A)  free riders who avoid revealing benefits from abatement. 
B)  determining specific individual damages and appropriate charges associated with pollutants. 
C)  necessarily lowering the price of the products. 
D)  requiring no agency to administer the tax.

Exam 17: Externalities, the Environment, and Natural Resources

Environmental destruction is peculiar to centrally planned economies.

Many of the new pollutants to which the world has been subjected are

Rising prices will discourage consumption and encourage conservation.

Explain why environmentally minded firms in a competitive industry will find it difficult to take environmental action.

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

Taking advantage of the built-in-loophole in emission taxes implies

Which of the following is most likely to reduce the consumption of an exhaustible natural resource?

Price controls on resources generally lead to surpluses.

Pollution is a relatively new phenomenon.

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

Economists believe it is feasible and desirable to reduce environmental damage to zero.

The increase in world oil prices during the 1970s was

Voluntarism as an approach to environmental problems

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.

Pollution is an example of a negative externality.

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

The pricing system has a failure built into it when externalities exist.

Recycling in the United States in recent years

Briefly and concisely define the following terms. a.voluntarism b.direct controls c.depletable resource

The use of pollution charges to reduce pollution confronts the problem of

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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