Question 1

Exhibit 10-4 The market for permits
  
-In Exhibit 10-4,suppose that there is a slowdown in the economy.That is illustrated by:

Accepted Answer

A) a shift from 'Demand 1' to 'Cap'. 
B) a shift from 'Demand 2' to 'Demand 1'. 
C) a shift from 'Demand 1' to 'Demand 2'. 
D) a shift from 'Cap' to 'Demand 2'. 
A) a shift from 'Demand 1' to 'Cap'. 
B) a shift from 'Demand 2' to 'Demand 1'. 
C) a shift from 'Demand 1' to 'Demand 2'. 
D) a shift from 'Cap' to 'Demand 2'. C

Question 2

Exhibit 10-2 Carbon emissions as an externality
  
-In Exhibit 10-2,which of the following is likely to be true?

Accepted Answer

A) Carbon emitting firms include the cost of carbon in their market cost (Supply 1). 
B) Firms exit the industry if the cost of carbon is not included in their market cost (Supply 1). 
C) Tax shifts the 'Supply 2' curve to the right. 
D) If firms are required to purchase emissions permits, the supply curve 'Supply 1' will shift to the left to supply curve 'Supply 2'. 
A) Carbon emitting firms include the cost of carbon in their market cost (Supply 1). 
B) Firms exit the industry if the cost of carbon is not included in their market cost (Supply 1). 
C) Tax shifts the 'Supply 2' curve to the right. 
D) If firms are required to purchase emissions permits, the supply curve 'Supply 1' will shift to the left to supply curve 'Supply 2'. D

Question 3

The emissions trading scheme is preferred by economists because:

Accepted Answer

A) clean air is not like any other scarce resource and cannot be traded on the market. 
B) it treats the clean air as a limited economic resource which is owned by consumers and firms have to pay to use it. 
C) once the trading scheme is in place, the firms have no control over how to minimise their losses. 
D) it is up to the firms to decide on how much emissions they can produce. 
A) clean air is not like any other scarce resource and cannot be traded on the market. 
B) it treats the clean air as a limited economic resource which is owned by consumers and firms have to pay to use it. 
C) once the trading scheme is in place, the firms have no control over how to minimise their losses. 
D) it is up to the firms to decide on how much emissions they can produce. B

Question 4

In Australia today,all minerals in the ground are owned by mining companies.

Accepted Answer

A) True 
 B)False

Question 5

If the carbon tax is imposed in order to reduce the emissions,it will:

Accepted Answer

A) increase the quantity of carbon intensive outputs. 
B) shift the demand for carbon intensive outputs to the right. 
C) have no impact on the quantity of carbon intensive outputs. 
D) lower the quantity of carbon intensive outputs. 
A) increase the quantity of carbon intensive outputs. 
B) shift the demand for carbon intensive outputs to the right. 
C) have no impact on the quantity of carbon intensive outputs. 
D) lower the quantity of carbon intensive outputs.

Question 6

Which of the following statements is true?

Accepted Answer

A) Under a super profits tax regime firms continue to operate indefinitely. 
B) Under a royalties regime firms continue to operate indefinitely. 
C) Under a super profits tax regime firms continue to operate if the price is equal to minimum ATC. 
D) Under a super profits tax regime firms exit the industry if the price is equal to minimum ATC. 
A) Under a super profits tax regime firms continue to operate indefinitely. 
B) Under a royalties regime firms continue to operate indefinitely. 
C) Under a super profits tax regime firms continue to operate if the price is equal to minimum ATC. 
D) Under a super profits tax regime firms exit the industry if the price is equal to minimum ATC.

Question 7

The MRRT means:

Accepted Answer

A) Mega Resource Return Tax. 
B) Minerals Rate of Return Tax. 
C) Marginal Rate of Return Tax. 
D) Minerals Resource Rent Tax. 
A) Mega Resource Return Tax. 
B) Minerals Rate of Return Tax. 
C) Marginal Rate of Return Tax. 
D) Minerals Resource Rent Tax.

Question 8

Which of the following statements is true?

Accepted Answer

A) Tax results in efficient market allocation. 
B) Super profits tax is the same as a royalty. 
C) The lower the tax for a firm the less is the firm's willingness to invest and take risks. 
D) Super profits tax would compensate the people of Australia for the value of the minerals extracted in mineral industries. 
A) Tax results in efficient market allocation. 
B) Super profits tax is the same as a royalty. 
C) The lower the tax for a firm the less is the firm's willingness to invest and take risks. 
D) Super profits tax would compensate the people of Australia for the value of the minerals extracted in mineral industries.

Question 9

Exhibit 10-2 Carbon emissions as an externality
  
-In Exhibit 10-2,what is the price of carbon intensive outputs if the supply is 'Supply 2'?

Accepted Answer

A) $30. 
B) $40. 
C) $50. 
D) $20. 
A) $30. 
B) $40. 
C) $50. 
D) $20.

Question 10

Exhibit 10-4 The market for permits
  
-In Exhibit 10-4,a decrease in demand for permits can be due to:

Accepted Answer

A) an economic boom. 
B) a new emissions reduction technology. 
C) a new technology that increases emissions. 
D) an increase in industry output. 
A) an economic boom. 
B) a new emissions reduction technology. 
C) a new technology that increases emissions. 
D) an increase in industry output.

Question 11

One of the criticisms of the tax is that:

Accepted Answer

A) there is an immediate reaction by the government to reduce or increase the tax. 
B) there is a time lag between the changes in the economy and the introduction of new technologies. 
C) the tax can be altered instantly to maintain the necessary level of emissions. 
D) the level of emissions is too high compared to the level of emissions without the tax. 
A) there is an immediate reaction by the government to reduce or increase the tax. 
B) there is a time lag between the changes in the economy and the introduction of new technologies. 
C) the tax can be altered instantly to maintain the necessary level of emissions. 
D) the level of emissions is too high compared to the level of emissions without the tax.

Question 12

The objective of the carbon tax is to encourage more production using carbon intensive technologies.

Accepted Answer

A) True 
 B)False

Question 13

An emissions trading scheme requires:

Accepted Answer

A) constant government intervention. 
B) the prices of the permits to be approved by the government on an individual basis. 
C) specific technologies nominated by government to be installed to reduce emissions. 
D) minimal government intervention. 
A) constant government intervention. 
B) the prices of the permits to be approved by the government on an individual basis. 
C) specific technologies nominated by government to be installed to reduce emissions. 
D) minimal government intervention.

Question 14

Exhibit 10-2 Carbon emissions as an externality
  
-In Exhibit 10-2,what is the quantity of carbon intensive outputs if the supply is 'Supply 2'?

Accepted Answer

A) 60. 
B) 40. 
C) 20. 
D) 80. 
A) 60. 
B) 40. 
C) 20. 
D) 80.

Question 15

Exhibit 10-2 Carbon emissions as an externality
  
-In Exhibit 10-2,the market demand curve 'Demand' and market supply curve 'Supply 1' establish a market equilibrium at:

Accepted Answer

A) 60 units of carbon intensive outputs at $30 per unit. 
B) 40 units of carbon intensive outputs at $30 per unit. 
C) 40 units of carbon intensive outputs at $40 per unit. 
D) 60 units of carbon intensive outputs at $50 per unit. 
A) 60 units of carbon intensive outputs at $30 per unit. 
B) 40 units of carbon intensive outputs at $30 per unit. 
C) 40 units of carbon intensive outputs at $40 per unit. 
D) 60 units of carbon intensive outputs at $50 per unit.

Question 16

Exhibit 10-2 Carbon emissions as an externality
  
-Suppose that firms are required to purchase equipment to reduce carbon emissions.How is this illustrated in Exhibit 10-2?

Accepted Answer

A) A shift from 'Supply 2' to 'Supply 1'. 
B) A movement along the 'Supply 1' curve. 
C) A shift in demand. 
D) A shift from 'Supply 1' to 'Supply 2'. 
A) A shift from 'Supply 2' to 'Supply 1'. 
B) A movement along the 'Supply 1' curve. 
C) A shift in demand. 
D) A shift from 'Supply 1' to 'Supply 2'.

Question 17

Which of the following is true?

Accepted Answer

A) There is only one useful policy to deal with the climate change: the carbon tax. 
B) The Australian government has argued that Australia should not deal with the climate change problem. 
C) Climate change is a problem that can be solved by one country alone. 
D) There is no international consensus on how to deal with the climate change problem. 
A) There is only one useful policy to deal with the climate change: the carbon tax. 
B) The Australian government has argued that Australia should not deal with the climate change problem. 
C) Climate change is a problem that can be solved by one country alone. 
D) There is no international consensus on how to deal with the climate change problem.

Question 18

The super profits tax was thought to:

Accepted Answer

A) force firms to be more competitive. 
B) target goods and services that are highly inelastic. 
C) target goods and services that are highly elastic. 
D) compensate mining companies for the full cost of royalties collected by state governments. 
A) force firms to be more competitive. 
B) target goods and services that are highly inelastic. 
C) target goods and services that are highly elastic. 
D) compensate mining companies for the full cost of royalties collected by state governments.

Question 19

An increase in the resources super profits tax is likely to:

Accepted Answer

A) increase employment and decrease output. 
B) increase employment and increase output. 
C) decrease employment and decrease output. 
D) decrease employment and increase output. 
A) increase employment and decrease output. 
B) increase employment and increase output. 
C) decrease employment and decrease output. 
D) decrease employment and increase output.

Question 20

Exhibit 10-1
  
-According to Exhibit 10-1,if the international price is MRp and the royalty is $100 per tonne,the output will be:

Accepted Answer

A) 60 units. 
B) 70 units. 
C) 50 units. 
D) 80 units. 
A) 60 units. 
B) 70 units. 
C) 50 units. 
D) 80 units.

Exhibit 10-4 The market for permits -In Exhibit 10-4,suppose that there is a slowdown in the economy.That is illustrated by:

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,which of the following is likely to be true?

The emissions trading scheme is preferred by economists because:

In Australia today,all minerals in the ground are owned by mining companies.

If the carbon tax is imposed in order to reduce the emissions,it will:

Which of the following statements is true?

The MRRT means:

Which of the following statements is true?

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,what is the price of carbon intensive outputs if the supply is 'Supply 2'?

Exhibit 10-4 The market for permits -In Exhibit 10-4,a decrease in demand for permits can be due to:

One of the criticisms of the tax is that:

The objective of the carbon tax is to encourage more production using carbon intensive technologies.

An emissions trading scheme requires:

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,what is the quantity of carbon intensive outputs if the supply is 'Supply 2'?

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,the market demand curve 'Demand' and market supply curve 'Supply 1' establish a market equilibrium at:

Exhibit 10-2 Carbon emissions as an externality -Suppose that firms are required to purchase equipment to reduce carbon emissions.How is this illustrated in Exhibit 10-2?

Which of the following is true?

The super profits tax was thought to:

An increase in the resources super profits tax is likely to:

Exhibit 10-1 -According to Exhibit 10-1,if the international price is MRp and the royalty is $100 per tonne,the output will be:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 10: Policy issues: resource taxes and climate change

Exhibit 10-4 The market for permits -In Exhibit 10-4,suppose that there is a slowdown in the economy.That is illustrated by:

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,which of the following is likely to be true?

The emissions trading scheme is preferred by economists because:

In Australia today,all minerals in the ground are owned by mining companies.

If the carbon tax is imposed in order to reduce the emissions,it will:

Which of the following statements is true?

The MRRT means:

Which of the following statements is true?

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,what is the price of carbon intensive outputs if the supply is 'Supply 2'?

Exhibit 10-4 The market for permits -In Exhibit 10-4,a decrease in demand for permits can be due to:

One of the criticisms of the tax is that:

The objective of the carbon tax is to encourage more production using carbon intensive technologies.

An emissions trading scheme requires:

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,what is the quantity of carbon intensive outputs if the supply is 'Supply 2'?

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,the market demand curve 'Demand' and market supply curve 'Supply 1' establish a market equilibrium at:

Exhibit 10-2 Carbon emissions as an externality -Suppose that firms are required to purchase equipment to reduce carbon emissions.How is this illustrated in Exhibit 10-2?

Which of the following is true?

The super profits tax was thought to:

An increase in the resources super profits tax is likely to:

Exhibit 10-1 -According to Exhibit 10-1,if the international price is MRp and the royalty is $100 per tonne,the output will be:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters