Question 1

Carbon tax was introduced in 2011 by the Gillard government.

Accepted Answer

A) True 
 B)False

Question 2

Under the emissions trading scheme,if lots of firms introduce emissions curbing technologies,the demand for permits:

Accepted Answer

A) might increase and their price fall. 
B) might decrease and their price rise. 
C) might increase and their price rise. 
D) might decrease and their price fall. 
A) might increase and their price fall. 
B) might decrease and their price rise. 
C) might increase and their price rise. 
D) might decrease and their price fall.

Question 3

Exhibit 10-2 Carbon emissions as an externality
  
-In Exhibit 10-2,which of the following is likely to be true? Assume that the private supply is 'Supply 1' and the supply including carbon tax is 'Supply 2'.

Accepted Answer

A) Global warming is not a local problem and firms should not be taxed. 
B) Since the discharge of the carbon dioxide in the atmosphere increased health care costs, the policy measures should be adopted to shift the supply curve 'Supply 1' to the left ('Supply 2'). 
C) The carbon tax will increase the price from $30 to $60 per unit. 
D) The demand is negatively related to the supply. 
A) Global warming is not a local problem and firms should not be taxed. 
B) Since the discharge of the carbon dioxide in the atmosphere increased health care costs, the policy measures should be adopted to shift the supply curve 'Supply 1' to the left ('Supply 2'). 
C) The carbon tax will increase the price from $30 to $60 per unit. 
D) The demand is negatively related to the supply.

Question 4

Exhibit 10-2 Carbon emissions as an externality
  
-Suppose government imposed a carbon tax to reduce carbon emissions.How is it 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 5

Resource taxes and royalties have declined from 40% to 15% of mineral industry profits in the last decade.

Accepted Answer

A) True 
 B)False

Question 6

Subsidisation of clean energy production is often achieved through a/an:

Accepted Answer

A) Emissions Trading Scheme (ETS). 
B) Green Energy Certificates (GECs) scheme. 
C) Renewable Energy Certificates (RECs) scheme. 
D) Clean Energy Certificates (CESs) scheme. 
A) Emissions Trading Scheme (ETS). 
B) Green Energy Certificates (GECs) scheme. 
C) Renewable Energy Certificates (RECs) scheme. 
D) Clean Energy Certificates (CESs) scheme.

Question 7

Exhibit 10-1
  
-According to Exhibit 10-1,if the international market price is MRp and a royalty is $100 per tonne,we would expect the marginal revenue to:

Accepted Answer

A) increase by $100. 
B) increase by $200. 
C) decrease by $200. 
D) decrease by $100. 
A) increase by $100. 
B) increase by $200. 
C) decrease by $200. 
D) decrease by $100.

Question 8

If the external costs of carbon emissions were included in the industry supply curve:

Accepted Answer

A) carbon emitters would use more resources but emit less. 
B) carbon emitters would use fewer resources and emit less. 
C) carbon emitters would use fewer resources but emit more. 
D) carbon emitters would use the same resources but emit less. 
A) carbon emitters would use more resources but emit less. 
B) carbon emitters would use fewer resources and emit less. 
C) carbon emitters would use fewer resources but emit more. 
D) carbon emitters would use the same resources but emit less.

Question 9

The carbon tax can be introduced when:

Accepted Answer

A) society has a low liability cost of pollution. 
B) the external cost of production is not accounted for in the market prices. 
C) government decides to reduce spending on rail and road infrastructure. 
D) producers adopt emissions reduction technologies. 
A) society has a low liability cost of pollution. 
B) the external cost of production is not accounted for in the market prices. 
C) government decides to reduce spending on rail and road infrastructure. 
D) producers adopt emissions reduction technologies.

Question 10

Which of the following statements is true?

Accepted Answer

A) A per tonne royalty may increase the level of mineral output and result in government revenues which are too low when prices are low. 
B) A per tonne royalty may reduce the level of mineral output and result in government revenues which are too high when prices are high. 
C) A per tonne royalty may reduce the level of mineral output and result in government revenues which are too low when prices are low. 
D) A per tonne royalty may reduce the level of mineral output and force some firms to exit the industry. 
A) A per tonne royalty may increase the level of mineral output and result in government revenues which are too low when prices are low. 
B) A per tonne royalty may reduce the level of mineral output and result in government revenues which are too high when prices are high. 
C) A per tonne royalty may reduce the level of mineral output and result in government revenues which are too low when prices are low. 
D) A per tonne royalty may reduce the level of mineral output and force some firms to exit the industry.

Question 11

Which of the following is true?

Accepted Answer

A) Regulation is a superior method of emissions reduction because it can be controlled by the government. 
B) Once the property rights are assigned, the carbon tax regime will adjust the private costs to the full social costs and the perfect market equilibrium will be achieved. 
C) Once the correct property rights are assigned and the market is competitive, the emissions trading scheme will achieve the socially desirable outcome. 
D) The property rights accompanied by regulation are superior policy solutions because the government knows better what is the best solution for emissions reduction. 
A) Regulation is a superior method of emissions reduction because it can be controlled by the government. 
B) Once the property rights are assigned, the carbon tax regime will adjust the private costs to the full social costs and the perfect market equilibrium will be achieved. 
C) Once the correct property rights are assigned and the market is competitive, the emissions trading scheme will achieve the socially desirable outcome. 
D) The property rights accompanied by regulation are superior policy solutions because the government knows better what is the best solution for emissions reduction.

Question 12

Which of the following statements is true?

Accepted Answer

A) When the mineral prices increase, the share of the value of the mineral going to taxpayers falls. 
B) When the mineral prices increase, the share of the value of the mineral going to taxpayers grows. 
C) When the mineral prices increase, the share of the value of the mineral going to mining companies falls. 
D) When the mineral prices decrease, the share of the value of the mineral going to mining companies grows. 
A) When the mineral prices increase, the share of the value of the mineral going to taxpayers falls. 
B) When the mineral prices increase, the share of the value of the mineral going to taxpayers grows. 
C) When the mineral prices increase, the share of the value of the mineral going to mining companies falls. 
D) When the mineral prices decrease, the share of the value of the mineral going to mining companies grows.

Question 13

Exhibit 10-2 Carbon emissions as an externality
  
-Assume that the private supply is 'Supply 1' and the supply including tax is 'Supply 2' (Exhibit 10-2).What is the reduction in the output after the carbon tax was imposed?

Accepted Answer

A) 0 units. 
B) 30 units. 
C) 20 units. 
D) 10 units. 
A) 0 units. 
B) 30 units. 
C) 20 units. 
D) 10 units.

Question 14

Super profits tax is:

Accepted Answer

A) a tax on the economic profits earned in extractive industries. 
B) a tax on the full economic costs earned in extractive industries. 
C) a tax on some economic profits earned in all industries. 
D) a tax on the economic costs and benefits created by extractive industries. 
A) a tax on the economic profits earned in extractive industries. 
B) a tax on the full economic costs earned in extractive industries. 
C) a tax on some economic profits earned in all industries. 
D) a tax on the economic costs and benefits created by extractive industries.

Question 15

An increase in royalty may decrease output because:

Accepted Answer

A) it provides an incentive to innovate. 
B) it changes the market structure of the industry. 
C) the supply of vital resources will decline. 
D) it reduces the profit. 
A) it provides an incentive to innovate. 
B) it changes the market structure of the industry. 
C) the supply of vital resources will decline. 
D) it reduces the profit.

Question 16

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

Accepted Answer

A) Equilibrium between the market demand 'Demand' curve and market supply 'Supply' curve indicate the over allocation of resources to carbon intensive activities. 
B) Supply curve 'Supply 2' includes the positive externality that is not included in the supply curve 'Supply 1'. 
C) If the carbon tax of $30 is imposed, the supply curve 'Supply 1' will shift to the right to supply curve 'Supply 2'. 
D) Carbon tax will result in 60 units of carbon intensive outputs at $30 per unit. 
A) Equilibrium between the market demand 'Demand' curve and market supply 'Supply' curve indicate the over allocation of resources to carbon intensive activities. 
B) Supply curve 'Supply 2' includes the positive externality that is not included in the supply curve 'Supply 1'. 
C) If the carbon tax of $30 is imposed, the supply curve 'Supply 1' will shift to the right to supply curve 'Supply 2'. 
D) Carbon tax will result in 60 units of carbon intensive outputs at $30 per unit.

Question 17

The replacement of a per-tonne royalty with a tax on super profits results in:

Accepted Answer

A) less tax revenue and a lower level of output. 
B) more tax revenue and a higher level of output. 
C) less tax revenue and a higher level of output. 
D) more tax revenue and a lower level of output. 
A) less tax revenue and a lower level of output. 
B) more tax revenue and a higher level of output. 
C) less tax revenue and a higher level of output. 
D) more tax revenue and a lower level of output.

Question 18

Carbon tax solution provides:

Accepted Answer

A) a similar outcome to that of government regulation. 
B) a similar outcome to that of a standard. 
C) a more efficient outcome than that of a 'cap and trade' scheme. 
D) a similar outcome to that of a 'cap and trade' scheme. 
A) a similar outcome to that of government regulation. 
B) a similar outcome to that of a standard. 
C) a more efficient outcome than that of a 'cap and trade' scheme. 
D) a similar outcome to that of a 'cap and trade' scheme.

Question 19

One of the reasons for introduction of the RSPT was:

Accepted Answer

A) to use some of the tax revenue to reduce the impact of structural changes in the economy. 
B) that Australians are paid more for minerals in the ground than their true value. 
C) that the tax revenue would be put to top up the insurance premiums to assist with recovery from natural disasters. 
D) to use some of the tax revenue to fund the government's foreign aid. 
A) to use some of the tax revenue to reduce the impact of structural changes in the economy. 
B) that Australians are paid more for minerals in the ground than their true value. 
C) that the tax revenue would be put to top up the insurance premiums to assist with recovery from natural disasters. 
D) to use some of the tax revenue to fund the government's foreign aid.

Question 20

Long-term changes in the world's climate are believed to be caused by:

Accepted Answer

A) human activity. 
B) natural changes in climate. 
C) pre-industrial revolution. 
D) governments' policies. 
A) human activity. 
B) natural changes in climate. 
C) pre-industrial revolution. 
D) governments' policies.

Carbon tax was introduced in 2011 by the Gillard government.

Under the emissions trading scheme,if lots of firms introduce emissions curbing technologies,the demand for permits:

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,which of the following is likely to be true? Assume that the private supply is 'Supply 1' and the supply including carbon tax is 'Supply 2'.

Exhibit 10-2 Carbon emissions as an externality -Suppose government imposed a carbon tax to reduce carbon emissions.How is it illustrated in Exhibit 10-2?

Resource taxes and royalties have declined from 40% to 15% of mineral industry profits in the last decade.

Subsidisation of clean energy production is often achieved through a/an:

Exhibit 10-1 -According to Exhibit 10-1,if the international market price is MRp and a royalty is $100 per tonne,we would expect the marginal revenue to:

If the external costs of carbon emissions were included in the industry supply curve:

The carbon tax can be introduced when:

Which of the following statements is true?

Which of the following is true?

Which of the following statements is true?

Exhibit 10-2 Carbon emissions as an externality -Assume that the private supply is 'Supply 1' and the supply including tax is 'Supply 2' (Exhibit 10-2).What is the reduction in the output after the carbon tax was imposed?

Super profits tax is:

An increase in royalty may decrease output because:

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

The replacement of a per-tonne royalty with a tax on super profits results in:

Carbon tax solution provides:

One of the reasons for introduction of the RSPT was:

Long-term changes in the world's climate are believed to be caused by:

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

Carbon tax was introduced in 2011 by the Gillard government.

Under the emissions trading scheme,if lots of firms introduce emissions curbing technologies,the demand for permits:

Exhibit 10-2 Carbon emissions as an externality -In Exhibit 10-2,which of the following is likely to be true? Assume that the private supply is 'Supply 1' and the supply including carbon tax is 'Supply 2'.

Exhibit 10-2 Carbon emissions as an externality -Suppose government imposed a carbon tax to reduce carbon emissions.How is it illustrated in Exhibit 10-2?

Resource taxes and royalties have declined from 40% to 15% of mineral industry profits in the last decade.

Subsidisation of clean energy production is often achieved through a/an:

Exhibit 10-1 -According to Exhibit 10-1,if the international market price is MRp and a royalty is $100 per tonne,we would expect the marginal revenue to:

If the external costs of carbon emissions were included in the industry supply curve:

The carbon tax can be introduced when:

Which of the following statements is true?

Which of the following is true?

Which of the following statements is true?

Exhibit 10-2 Carbon emissions as an externality -Assume that the private supply is 'Supply 1' and the supply including tax is 'Supply 2' (Exhibit 10-2).What is the reduction in the output after the carbon tax was imposed?

Super profits tax is:

An increase in royalty may decrease output because:

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

The replacement of a per-tonne royalty with a tax on super profits results in:

Carbon tax solution provides:

One of the reasons for introduction of the RSPT was:

Long-term changes in the world's climate are believed to be caused by:

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