Question 1

Once the carbon trading scheme is in place:

Accepted Answer

A)  the price/output adjustments will be possible without the intervention of the government. 
B)  the government will need to regulate the price or output. 
C)  the price/output adjustments will be impossible without the intervention of the
Government. 
D)  the price will be adjusted easily by the market but the output adjustments have to be done by the government. 
A)  the price/output adjustments will be possible without the intervention of the government. 
B)  the government will need to regulate the price or output. 
C)  the price/output adjustments will be impossible without the intervention of the
Government. 
D)  the price will be adjusted easily by the market but the output adjustments have to be done by the government. A

Question 2

An example of a policy that is not designed to reduce the output of the activity creating the negative externality is a:

Accepted Answer

A)  congestion charge. 
B)  policy that restricts the fishing activity. 
C)  competition policy. 
D)  policy that creates property rights. 
A)  congestion charge. 
B)  policy that restricts the fishing activity. 
C)  competition policy. 
D)  policy that creates property rights. C

Question 3

Narrbegin 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. B

Question 4

The industry supply curve typically:

Accepted Answer

A)  includes all costs including social costs. 
B)  does not include the external costs. 
C)  only includes external costs. 
D)  includes internal and external costs. 
A)  includes all costs including social costs. 
B)  does not include the external costs. 
C)  only includes external costs. 
D)  includes internal and external costs.

Question 5

The revenue from the carbon tax:

Accepted Answer

A)  could be used to fund more hospitals. 
B)  could be used to fully compensate those damaged by the pollution. 
C)  could be used to fully compensate those who are paying the carbon tax. 
D)  could be used to make industries more competitive internationally. 
A)  could be used to fund more hospitals. 
B)  could be used to fully compensate those damaged by the pollution. 
C)  could be used to fully compensate those who are paying the carbon tax. 
D)  could be used to make industries more competitive internationally.

Question 6

Climate change is:

Accepted Answer

A)  long-term changes in the world's climate. 
B)  short-term changes in the world's climate. 
C)  long-term changes in the local climate. 
D)  short-term changes in the local climate. 
A)  long-term changes in the world's climate. 
B)  short-term changes in the world's climate. 
C)  long-term changes in the local climate. 
D)  short-term changes in the local climate.

Question 7

The climate change problem involves:

Accepted Answer

A)  international participation, the positive externality and various policy options. 
B)  international participation, the negative externality and only one policy option such as carbon tax. 
C)  international participation, the negative externality and only voluntary agreements among producers. 
D)  international participation, the negative externality and various policy options. 
A)  international participation, the positive externality and various policy options. 
B)  international participation, the negative externality and only one policy option such as carbon tax. 
C)  international participation, the negative externality and only voluntary agreements among producers. 
D)  international participation, the negative externality and various policy options.

Question 8

A New South Wales government subsidised the installation of household solar rooftop generators at the cost of:

Accepted Answer

A)  $520-$640 per household. 
B)  $52-$64 per tonne of carbon reduced. 
C)  $20-$40 per tonne of carbon reduced. 
D)  $520-$640 per tonne of carbon reduced. 
A)  $520-$640 per household. 
B)  $52-$64 per tonne of carbon reduced. 
C)  $20-$40 per tonne of carbon reduced. 
D)  $520-$640 per tonne of carbon reduced.

Question 9

Narrbegin Exhibit 10.4 The market for permits   
-In Exhibit 10.4, if the demand for permits is 'Demand 1', the price of permits is equal to:

Accepted Answer

A)  $50. 
B)  $30. 
C)  $20. 
D)  $10. 
A)  $50. 
B)  $30. 
C)  $20. 
D)  $10.

Question 10

Narrbegin 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:

Accepted Answer

A)  socially desirable level of emissions. 
B)  market equilibrium. 
C)  regulated output. 
D)  price and quantity of external costs. 
A)  socially desirable level of emissions. 
B)  market equilibrium. 
C)  regulated output. 
D)  price and quantity of external costs.

Question 11

The most important contributor to climate change is:

Accepted Answer

A)  carbon dioxide (SO2). 
B)  sulphur dioxide (CO2). 
C)  carton dioxide (KO2). 
D)  carbon dioxide (CO2). 
A)  carbon dioxide (SO2). 
B)  sulphur dioxide (CO2). 
C)  carton dioxide (KO2). 
D)  carbon dioxide (CO2).

Question 12

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 13

Narrbegin Exhibit 10.4 The market for permits   
-In Exhibit 10.4, if the demand for permits is 'Demand 2', the price of permits is equal to:

Accepted Answer

A)  $50. 
B)  $30. 
C)  $20. 
D)  $10. 
A)  $50. 
B)  $30. 
C)  $20. 
D)  $10.

Question 14

Which of the following statements is true?

Accepted Answer

A)  The reduced demand for permits would increase their price. 
B)  The reduced demand for permits would shift the industry supply curve for carbon intensive output to the left. 
C)  The increased demand for permits would increase firms' costs and shift the supply curve for carbon intensive outputs to the left. 
D)  The reduced demand for permits would lower their price, lower firms' costs, and shift the industry supply curve for carbon intensive outputs to the right. 
A)  The reduced demand for permits would increase their price. 
B)  The reduced demand for permits would shift the industry supply curve for carbon intensive output to the left. 
C)  The increased demand for permits would increase firms' costs and shift the supply curve for carbon intensive outputs to the left. 
D)  The reduced demand for permits would lower their price, lower firms' costs, and shift the industry supply curve for carbon intensive outputs to the right.

Question 15

The upper limit to allowable emissions is called:

Accepted Answer

A)  cap. 
B)  ceiling. 
C)  unacceptable level of emissions. 
D)  lowest level of emissions. 
A)  cap. 
B)  ceiling. 
C)  unacceptable level of emissions. 
D)  lowest level of emissions.

Question 16

Narrbegin 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

Narrbegin Exhibit 10.3 Price and demand for permits data
 $$\begin{array} { |c | c |} 
\hline \text { Price } & \text { Quantity } \
\hline 10 & 110 \
\hline 20 & 100 \
\hline 30 & 90 \
\hline 40 & 80 \
\hline 50 & 70 \
\hline 60 & 60\
\hline
\end{array}$$ Narrend
-In Exhibit 10.3, if the 'cap' is set at 80 permits, and the demand for the permits decreased by 20 units at each price level, the resulting price of permits is equal to:

Accepted Answer

A)  $50. 
B)  $30. 
C)  $10. 
D)  $20 
A)  $50. 
B)  $30. 
C)  $10. 
D)  $20

Question 18

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 19

Narrbegin 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 20

Economists prefer:

Accepted Answer

A)  regulation to solve the problem of emissions. 
B)  emissions trading schemes to market regulation. 
C)  the political agenda to control the level of emissions. 
D)  government to prescribe the technology to be used for emissions reduction. 
A)  regulation to solve the problem of emissions. 
B)  emissions trading schemes to market regulation. 
C)  the political agenda to control the level of emissions. 
D)  government to prescribe the technology to be used for emissions reduction.

Once the carbon trading scheme is in place:

An example of a policy that is not designed to reduce the output of the activity creating the negative externality is a:

Narrbegin 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'.

The industry supply curve typically:

The revenue from the carbon tax:

Climate change is:

The climate change problem involves:

A New South Wales government subsidised the installation of household solar rooftop generators at the cost of:

Narrbegin Exhibit 10.4 The market for permits -In Exhibit 10.4, if the demand for permits is 'Demand 1', the price of permits is equal to:

Narrbegin 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:

The most important contributor to climate change is:

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

Narrbegin Exhibit 10.4 The market for permits -In Exhibit 10.4, if the demand for permits is 'Demand 2', the price of permits is equal to:

Which of the following statements is true?

The upper limit to allowable emissions is called:

Narrbegin Exhibit 10.2 Carbon emissions as an externality -In Exhibit 10.2, which of the following is likely to be true?

Narrbegin Exhibit 10.3 Price and demand for permits data Price Quantity 10 110 20 100 30 90 40 80 50 70 60 60 Narrend -In Exhibit 10.3, if the 'cap' is set at 80 permits, and the demand for the permits decreased by 20 units at each price level, the resulting price of permits is equal to:

An emissions trading scheme requires:

Narrbegin 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?

Economists prefer:

Thinking Like an Economist

Applying Graphs to Economics

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

Filters

Exam 11: Policy Issues: Housing Affordability and Climate Change

Once the carbon trading scheme is in place:

An example of a policy that is not designed to reduce the output of the activity creating the negative externality is a:

Narrbegin 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'.

The industry supply curve typically:

The revenue from the carbon tax:

Climate change is:

The climate change problem involves:

A New South Wales government subsidised the installation of household solar rooftop generators at the cost of:

Narrbegin Exhibit 10.4 The market for permits -In Exhibit 10.4, if the demand for permits is 'Demand 1', the price of permits is equal to:

Narrbegin 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:

The most important contributor to climate change is:

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

Narrbegin Exhibit 10.4 The market for permits -In Exhibit 10.4, if the demand for permits is 'Demand 2', the price of permits is equal to:

Which of the following statements is true?

The upper limit to allowable emissions is called:

Narrbegin Exhibit 10.2 Carbon emissions as an externality -In Exhibit 10.2, which of the following is likely to be true?

Narrbegin Exhibit 10.3 Price and demand for permits data Price Quantity 10 110 20 100 30 90 40 80 50 70 60 60 Narrend -In Exhibit 10.3, if the 'cap' is set at 80 permits, and the demand for the permits decreased by 20 units at each price level, the resulting price of permits is equal to:

An emissions trading scheme requires:

Narrbegin 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?

Economists prefer:

Thinking Like an Economist

Applying Graphs to Economics

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

Filters