Question 1

Economic analysis indicates that environmental quality

Accepted Answer

A) is something that people value,and therefore are willing to pay for. 
B) should always be regulated by the government. 
C) is something people should be forced to pay for no matter what their income levels. 
D) is not important to most people. 
A) is something that people value,and therefore are willing to pay for. 
B) should always be regulated by the government. 
C) is something people should be forced to pay for no matter what their income levels. 
D) is not important to most people. A

Question 2

Which of the following is the most efficient way to reduce pollution emissions?

Accepted Answer

A) Emission standards that cap allowable pollution. 
B) Government pollution charges or taxes. 
C) Legislated regulations limiting the quantity of emissions allowed by each firm. 
D) Enforcement of property rights,when those rights are well-defined and transaction costs are low. 
A) Emission standards that cap allowable pollution. 
B) Government pollution charges or taxes. 
C) Legislated regulations limiting the quantity of emissions allowed by each firm. 
D) Enforcement of property rights,when those rights are well-defined and transaction costs are low. D

Question 3

Most scientists agree that

Accepted Answer

A) if global warming continues for another century,the sea levels will rise substantially,imposing costs much larger than the cost of preventing the warming. 
B) the earth has warmed about one degree Fahrenheit in the past century. 
C) global warming will substantially reduce future rates of economic growth and lead to sharp reductions in living standards. 
D) regulations like those outlined in the Kyoto Protocol will substantially reduce global warming. 
A) if global warming continues for another century,the sea levels will rise substantially,imposing costs much larger than the cost of preventing the warming. 
B) the earth has warmed about one degree Fahrenheit in the past century. 
C) global warming will substantially reduce future rates of economic growth and lead to sharp reductions in living standards. 
D) regulations like those outlined in the Kyoto Protocol will substantially reduce global warming. B

Question 4

Which of the following is most likely to have the strongest demand for environmental quality?

Accepted Answer

A) countries with water pollution problems 
B) poor countries 
C) countries with air pollution problems 
D) wealthy countries 
A) countries with water pollution problems 
B) poor countries 
C) countries with air pollution problems 
D) wealthy countries

Question 5

Overfishing in the ocean often

Accepted Answer

A) is easily solved by shortening the fishing season. 
B) is not caused by better technologies,which today's fishers would not use if they harmed the resource. 
C) occurs only when regulators fail to regulate due to corruption. 
D) is caused by many boats racing to catch more fish in a very short season. 
A) is easily solved by shortening the fishing season. 
B) is not caused by better technologies,which today's fishers would not use if they harmed the resource. 
C) occurs only when regulators fail to regulate due to corruption. 
D) is caused by many boats racing to catch more fish in a very short season.

Question 6

Which of the following is true?

Accepted Answer

A) All types of environmental problems can be solved simply by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Regulation nearly always leads to economically efficient outcomes. 
D) Government regulation is subject to the same problems caused by lack of information and lack of incentives for economic efficiency that plagued centrally planned economies. 
A) All types of environmental problems can be solved simply by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Regulation nearly always leads to economically efficient outcomes. 
D) Government regulation is subject to the same problems caused by lack of information and lack of incentives for economic efficiency that plagued centrally planned economies.

Question 7

For a privately owned business in a competitive market setting,

Accepted Answer

A) reducing resource use while producing the same output adds to profit and typically reduces waste products and thus cuts pollution as well. 
B) when property rights are well-defined and strictly enforced,the firm will be able to pollute air and water without having to bear the cost of the damages imposed on others. 
C) wasteful use of resources results in more pollution but greater profit. 
D) reducing pollution almost never pays. 
A) reducing resource use while producing the same output adds to profit and typically reduces waste products and thus cuts pollution as well. 
B) when property rights are well-defined and strictly enforced,the firm will be able to pollute air and water without having to bear the cost of the damages imposed on others. 
C) wasteful use of resources results in more pollution but greater profit. 
D) reducing pollution almost never pays.

Question 8

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is

Accepted Answer

A) extremely high because policies that would significantly reduce emissions will adversely affect economic growth. 
B) insignificant compared to the probable impact of warming from those emissions. 
C) irrelevant because each aspect of the environment is important enough to justify full protection from environmental change,at whatever cost is necessary. 
D) zero because fuel cost savings alone will offset all opportunity costs. 
A) extremely high because policies that would significantly reduce emissions will adversely affect economic growth. 
B) insignificant compared to the probable impact of warming from those emissions. 
C) irrelevant because each aspect of the environment is important enough to justify full protection from environmental change,at whatever cost is necessary. 
D) zero because fuel cost savings alone will offset all opportunity costs.

Question 9

Pollution charges will be efficient if

Accepted Answer

A) the charge is just equal to the cost borne by others from the pollution. 
B) the charge is greater than the cost borne by others from the pollution. 
C) the charge is less than the cost borne by others from the pollution. 
D) none of the above. 
A) the charge is just equal to the cost borne by others from the pollution. 
B) the charge is greater than the cost borne by others from the pollution. 
C) the charge is less than the cost borne by others from the pollution. 
D) none of the above.

Question 10

When is the definition and enforcement of property rights especially difficult?

Accepted Answer

A) when many polluters harm a large group of people by emitting the same pollutant 
B) when a single polluter is harming a single person or entity 
C) when land is owned by a corporation 
D) when the benefits of prosecution are clear 
A) when many polluters harm a large group of people by emitting the same pollutant 
B) when a single polluter is harming a single person or entity 
C) when land is owned by a corporation 
D) when the benefits of prosecution are clear

Question 11

When a park is funded by visitors,but not by taxpayers in general,

Accepted Answer

A) there will be too few parks because most people simply will not pay to use a park. 
B) visitors will be better served because poor service would lead to reductions in revenues. 
C) maintenance in the park will suffer because budgets will decline. 
D) we cannot predict what will happen because park funding by visitors has not been tried before. 
A) there will be too few parks because most people simply will not pay to use a park. 
B) visitors will be better served because poor service would lead to reductions in revenues. 
C) maintenance in the park will suffer because budgets will decline. 
D) we cannot predict what will happen because park funding by visitors has not been tried before.

Question 12

An economist would argue that global warming is

Accepted Answer

A) unquestionably a human-generated problem that should be stopped immediately at all costs. 
B) simply fear mongering,for there is no scientific evidence that the average temperature on earth is changing. 
C) likely to cause massive starvation as temperatures on earth rise,reducing agricultural productivity. 
D) a serious issue that may best be addressed primarily by making changes as problems occur in the future. 
A) unquestionably a human-generated problem that should be stopped immediately at all costs. 
B) simply fear mongering,for there is no scientific evidence that the average temperature on earth is changing. 
C) likely to cause massive starvation as temperatures on earth rise,reducing agricultural productivity. 
D) a serious issue that may best be addressed primarily by making changes as problems occur in the future.

Question 13

Economic analysis implies that one of the most effective ways to deal with potential damages from environmental pollution is to

Accepted Answer

A) declare the relevant resources to be public goods,owned by the public. 
B) establish and enforce property rights for the resources that are being damaged,if possible. 
C) allow the government to take over and control all natural resources. 
D) enact legislation that makes all environmental pollution illegal. 
A) declare the relevant resources to be public goods,owned by the public. 
B) establish and enforce property rights for the resources that are being damaged,if possible. 
C) allow the government to take over and control all natural resources. 
D) enact legislation that makes all environmental pollution illegal.

Question 14

Empirical evidence indicates that

Accepted Answer

A) changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide. 
B) the increase in carbon dioxide,over thousands of years,is clearly the cause of global warming. 
C) if global warming continues for another century,as most models forecast,the sea levels will clearly rise substantially,imposing costs much larger than the cost of preventing the warming. 
D) the earth has warmed a little more than one degree Fahrenheit in the past century. 
A) changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide. 
B) the increase in carbon dioxide,over thousands of years,is clearly the cause of global warming. 
C) if global warming continues for another century,as most models forecast,the sea levels will clearly rise substantially,imposing costs much larger than the cost of preventing the warming. 
D) the earth has warmed a little more than one degree Fahrenheit in the past century.

Question 15

Government regulation is

Accepted Answer

A) subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies. 
B) the only reliable way to improve environmental quality. 
C) not subject to political concerns when it comes to environmental quality. 
D) the most economically efficient way to reduce greenhouse gases. 
A) subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies. 
B) the only reliable way to improve environmental quality. 
C) not subject to political concerns when it comes to environmental quality. 
D) the most economically efficient way to reduce greenhouse gases.

Question 16

Which of the following would illustrate an example that leads to high transaction costs when dealing with pollution?

Accepted Answer

A) air quality in New York City 
B) water pollution caused by a large number of firms at a location near the same river 
C) noise pollution from aircraft near a busy airport 
D) all of the above 
A) air quality in New York City 
B) water pollution caused by a large number of firms at a location near the same river 
C) noise pollution from aircraft near a busy airport 
D) all of the above

Question 17

Environmental regulation by the government

Accepted Answer

A) leads to ideal outcomes in most cases. 
B) is often based on goals for pollution levels that were determined by market signals. 
C) is most appropriate when the pollution of concern comes from many sources. 
D) is most likely to be economically efficient when the regulation provides substantial benefits for special-interest groups. 
A) leads to ideal outcomes in most cases. 
B) is often based on goals for pollution levels that were determined by market signals. 
C) is most appropriate when the pollution of concern comes from many sources. 
D) is most likely to be economically efficient when the regulation provides substantial benefits for special-interest groups.

Question 18

When the federal government owns land resources,such as parks,that are funded by tax dollars,

Accepted Answer

A) park mangers receive full information about visitor desires simply by asking visitors. 
B) public park managers have the same incentives as private park managers,where visitors pay at least the actual costs of use. 
C) park managers devote much time and effort to satisfying congressional desires instead of visitor desires. 
D) park managers will be well-informed of visitor demands regardless of the funding mechanism. 
A) park mangers receive full information about visitor desires simply by asking visitors. 
B) public park managers have the same incentives as private park managers,where visitors pay at least the actual costs of use. 
C) park managers devote much time and effort to satisfying congressional desires instead of visitor desires. 
D) park managers will be well-informed of visitor demands regardless of the funding mechanism.

Question 19

Higher levels of carbon dioxide may have led,over the past century,to approximately a

Accepted Answer

A) 1 degree (F)warming of the earth. 
B) 10 degree (F)warming of the earth. 
C) 1 degree (F)cooling of the earth. 
D) 10 degree (F)cooling of the earth. 
A) 1 degree (F)warming of the earth. 
B) 10 degree (F)warming of the earth. 
C) 1 degree (F)cooling of the earth. 
D) 10 degree (F)cooling of the earth.

Question 20

The fish in the ocean are

Accepted Answer

A) allocated efficiently because there are no limitations on entry into the ocean fisheries business. 
B) scarce,but only because of the highly restrictive regulations imposed by various nations. 
C) a commonly owned,open access resource and therefore they are often over-exploited. 
D) privately owned and therefore they are allocated efficiently. 
A) allocated efficiently because there are no limitations on entry into the ocean fisheries business. 
B) scarce,but only because of the highly restrictive regulations imposed by various nations. 
C) a commonly owned,open access resource and therefore they are often over-exploited. 
D) privately owned and therefore they are allocated efficiently.

Exam 42: Difficult Environmental Cases and the Role of Government

Economic analysis indicates that environmental quality

Which of the following is the most efficient way to reduce pollution emissions?

Most scientists agree that

Which of the following is most likely to have the strongest demand for environmental quality?

Overfishing in the ocean often

Which of the following is true?

For a privately owned business in a competitive market setting,

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is

Pollution charges will be efficient if

When is the definition and enforcement of property rights especially difficult?

When a park is funded by visitors,but not by taxpayers in general,

An economist would argue that global warming is

Economic analysis implies that one of the most effective ways to deal with potential damages from environmental pollution is to

Empirical evidence indicates that

Government regulation is

Which of the following would illustrate an example that leads to high transaction costs when dealing with pollution?

Environmental regulation by the government

When the federal government owns land resources,such as parks,that are funded by tax dollars,

Higher levels of carbon dioxide may have led,over the past century,to approximately a

The fish in the ocean are

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

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