Question 1

If a glass manufacturer has only a few _______ of reducing pollutants, it will _______.

Accepted Answer

A)  costly ways; end up paying the pollution tax. 
B)  inexpensive ways; incur the pollution tax instead. 
C)  costly ways; do so to minimize its pollution taxes. 
D)  inexpensive ways; buy the most expensive technology.

Question 2

Low and middle-income societies correctly point out that high-income countries have historically

Accepted Answer

A)  been the primary contributors to greenhouse warming. 
B)  been the primary contributors to reduced biodiversity. 
C)  failed to put environmental protection ahead of corporate profits. 
D)  legitimately lacked moral standing in addition to all the above.

Question 3

If pollutants are emitted into the air and water, what costs might be incurred as a result?

Accepted Answer

A)  compromised recreation possibilities 
B)  decreased property values 
C)  loss from destruction of wildlife habitat 
D)  health injuries and all of the above

Question 4

Bulgaria primarily produces two goods, nesting dolls and grapes. The production of both goods primarily requires labor. The following table shows possible combinations of nesting dolls and grapes.

Which of the following points is not feasible?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D

Question 5

Briefly explain the likely results of increasing the extent of environmental regulation.

Accepted Answer

The answer of Briefly explain the likely results of increasing...

Question 6

The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below.

The equilibrium price and quantity when only private costs are taken into account are

Accepted Answer

A)  Price = $55, Quantity = 30 
B)  Price = $40, Quantity = 55 
C)  Price = $30, Quantity = 20 
D)  Price = $30, Quantity = 80

Question 7

A positive externality arises in a situation where a third party, outside the transaction,

Accepted Answer

A)  fails to allocate resources efficiently. 
B)  suffers from a market transaction by others. 
C)  benefits from a market transaction by others. 
D)  pays a pollution tax to balance social costs.

Question 8

Some of the leading ecotourism destinations include:

Accepted Answer

A)  Costa Rica and Panama in Central America 
B)  Malaysia and the Galapagos Islands 
C)  the Serengeti in Tanzania; the Amazon rain forests 
D)  the Caribbean, New Zealand and all of the above

Question 9

The property rights approach to environmental issues often becomes highly relevant in cases involving _______.

Accepted Answer

A)  greenhouse gas emissions 
B)  harmful affects of acid rain 
C)  endangered species 
D)  fresh water resources

Question 10

What type of environmental tool was adopted by the U.S. government in 1990, in order to reduce emissions of coal burning electricity-generating plants?

Accepted Answer

A)  shrinkable marketable permits 
B)  free marketable permits 
C)  command-and-control permits 
D)  both a and b above

Question 11

Michigan MI) and Wisconsin WI) both border Lake Michigan. Both states pollute Lake Michigan and both states suffer the consequences of the pollution. However, the two states face a prisoner's dilemma of the sort studied in Chapter 12. Each country must decide whether to protect or not to protect Lake Michigan from pollution. The payoffs from the choices are shown in the table below.

From the table, we know that the outcome of this game will be

Accepted Answer

A)  neither state choosing to protect the lake 
B)  Wisconsin choosing to not protect the lake, Michigan choosing to protect the lake 
C)  Wisconsin choosing to protect the lake, Michigan choosing to not protect the lake 
D)  both states choosing to protect the lake

Question 12

Briefly explain what is meant by the term "externality" and how it occurs.

Accepted Answer

The answer of Briefly explain what is meant by the...

Question 13

The term _______ refers to a market exchange that affects a third party who is outside or external to the exchange.

Accepted Answer

A)  social costs 
B)  spillover 
C)  market failure 
D)  private costs

Question 14

Michigan MI) and Wisconsin WI) both border Lake Michigan. Both states pollute Lake Michigan and both states suffer the consequences of the pollution. However, the two states face a prisoner's dilemma of the sort studied in Chapter 12. Each country must decide whether to protect or not to protect Lake Michigan from pollution. The payoffs from the choices are shown in the table below.

From the table, we know that if Wisconsin chooses to protect the lake, Michigan will choose to _______
The lake. If Wisconsin chooses to not protect the lake, Michigan will choose to _______ the lake

Accepted Answer

A)  protect, protect 
B)  not protect, protect 
C)  protect, not protect 
D)  not protect, not protect

Question 15

Briefly discuss the shortcomings of environmental command-and-control regulations.

Accepted Answer

The answer of Briefly discuss the shortcomings of environmental command-and-control...

Question 16

Since 1969, when the Cuyahoga River in Ohio was so polluted that it spontaneously burst into flame, the overall quality of water in the U.S. has

Accepted Answer

A)  steadily declined. 
B)  remained unchanged. 
C)  steadily improved. 
D)  remained a non-issue.

Question 17

The flexibility of marketable permits program developed for the oil refining industry is credited
With achieving the reduction in lead pollution for _______ control regulation would have required.

Accepted Answer

A)  at least 50% 
B)  50% 
C)  20% 
D)  at least 20%

Question 18

The problem of pollution typically arises in _______economies around the world.

Accepted Answer

A)  high-income 
B)  low-income 
C)  high or low-income 
D)  middle income

Question 19

If no externalities of pollution exist in a particular industry, the interaction of demand and supply _______.

Accepted Answer

A)  is based on benefits individuals perceive while maximizing utility 
B)  is based on choices about production relative to total average costs 
C)  will coordinate social costs and benefits 
D)  shifts so supply has no relation to social costs

Question 20

The arguments presented by economists regarding U.S. environmental command-and-control regulations generally

Accepted Answer

A)  accept the goal of reducing pollution. 
B)  question the regulations as being the best policy tools for meeting reduction goals. 
C)  assert that these laws are clear of the usual fine print, loopholes and exceptions. 
D)  lack flexibility and a and b above.

Exam 12: Environmental Protection and Negative Externalities

If a glass manufacturer has only a few _ of reducing pollutants, it will _.