Question 1

What is the economically efficient level of emissions from a particular source?

Accepted Answer

A) zero 
B) the quantity at which the marginal cost to achieve lower emissions equals the additional value of reducing pollution 
C) the level determined by EPA (Environmental Protection Agency)scientists that will save the most lives 
D) the level emitted when markets are allowed to function with no government regulation

Question 2

Pollution from a privately owned factory that seriously harms a privately owned forest will,if property rights are strongly protected,

Accepted Answer

A) not result in penalties to the polluter,who has a right to use his property as he wishes. 
B) make the polluter liable for any damages done to the forest. 
C) be ignored under the law,in favor of the polluting factory owner. 
D) never occur.

Question 3

When it comes to environmental policy,

Accepted Answer

A) choices are influenced by the costs and benefits that decision makers expect. 
B) values are subjective,as in other areas of the economy. 
C) policy choices often have unintended secondary effects. 
D) all of the above are true.

Question 4

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include

Accepted Answer

A) fuel-use reductions that would slow economic growth in most of the world. 
B) economizing on energy use in ways that would,on balance,increase economic growth. 
C) very few costs that would affect resource-conserving industrial nations such as the United States. 
D) high costs in developing nations such as India but not in industrial nations.

Question 5

"Since the wind and the flowing rivers can take away industrial waste without charge,polluting is a profitable activity even when people are seriously harmed downwind or downstream,unless environmental regulators stop it." This statement is

Accepted Answer

A) false if the property rights of downwind or downstream individuals are protected. 
B) true if the property rights of industrialists are enforced. 
C) never true. 
D) always true.

Question 6

When the federal government owns parks that are funded by tax dollars,

Accepted Answer

A) park managers receive full information about visitor desires and make decisions accordingly. 
B) the same incentive structure exists for public park managers as private park managers. 
C) park managers devote much time and effort to satisfying political desires instead of visitor desires. 
D) park managers will be less likely to mismanage the park.

Question 7

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

Accepted Answer

A) When many polluters harm a large group of people with 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 8

Which of the following is,so far,the most utilized method to reduce emissions of industrial pollution to politically chosen levels,while encouraging efficient choices by polluters?

Accepted Answer

A) government pollution charges or taxes 
B) non-tradable emission standards that cap allowable pollution for each emitter 
C) cap and trade emission permits 
D) regulations that would effectively prohibit all emissions

Question 9

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 will not pay to use a park. 
B) visitors will be better served,because poor service would lead to reductions in revenues. 
C) park budgets will decline. 
D) park quality will decline.

Question 10

With regard to environmental programs and regulations,economic analysis indicates that

Accepted Answer

A) environmental quality is something that people value and,therefore,are willing to pay for. 
B) people value many other things,but environmental values always come first. 
C) income levels exert little impact on the demand for environmental quality. 
D) the cost of an environmental policy matters little if the policy provides environmental health benefits.

Question 11

Most of our environmental problems exist because of

Accepted Answer

A) a lack of enforced and easily traded property rights. 
B) consumer ignorance. 
C) profit maximization on the part of business firms. 
D) the failure of political officials to regulate business activities.

Question 12

Besides the scientific uncertainties,which of the following has kept most economists from recommending strong regulations to reduce emissions of carbon dioxide?

Accepted Answer

A) consumer ignorance 
B) the Kyoto Protocol 
C) high costs and the potential for special-interest involvement in regulations 
D) The Clean Air Act of 1990

Question 13

Which of the following is true?

Accepted Answer

A) All types of environmental problems can be solved merely by the enforcement of individual property rights. 
B) Environmental regulation cannot improve environmental quality. 
C) Income levels exert little impact on the demand for environmental quality. 
D) Markets often result in outcomes that are inefficient when it is difficult to assign and enforce property rights.

Question 14

Individual transferable quotas (ITQs)have been shown to

Accepted Answer

A) increase the value of fisheries but reduce the safety of fishers as the season is shortened. 
B) end overfishing by making the use of efficient technology illegal. 
C) increase the safety of fishing but not the value to consumers of the product. 
D) increase the value to consumers of the product and raise the price received by fishers.

Question 15

When it is difficult to assign and enforce property rights,

Accepted Answer

A) markets result in outcomes that are often inefficient. 
B) courts can easily negotiate efficient outcomes. 
C) establishing better property rights is always the best way to deal with environmental problems. 
D) government regulation can never improve on the outcomes generated by competitive markets.

Question 16

The scientific evidence on the causes and consequences of global warming

Accepted Answer

A) is clear and indisputable. 
B) is uncertain and variable. 
C) indicates global warming should be stopped regardless of cost. 
D) is of no importance to economists.

Question 17

(I)Richer people are more willing to make sacrifices to gain greater environmental quality.
(II)Poor countries are not as resilient when faced with the threats caused by environmental degradation.

Accepted Answer

A) Both I and II are true. 
B) I is true;II is false. 
C) I is false;II is true. 
D) Both I and II are false.

Question 18

"The United States should not sign the Kyoto Protocol,an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels." An economist should be expected to

Accepted Answer

A) disagree with this statement.The science on global warming is clearly known,and the Kyoto Protocol is the best,lowest cost,method to minimize the effects of global warming. 
B) disagree with this statement.Even though much critical information is still missing,the Kyoto Protocol will certainly reduce carbon emissions enough to greatly reduce atmospheric warming. 
C) agree with this statement.The benefits of a warming climate will unquestionably be greater than the costs. 
D) probably agree with this statement.The costs of the Kyoto Protocol are great,and the expected impact from it on world temperatures over the next century is extremely small.

Question 19

Which of the following is an example of a deficiency caused by a regulatory approach to pollution?

Accepted Answer

A) ignored information provided by market signals 
B) special interest influence on policies 
C) lack of accountability by regulators for costs of regulation 
D) all of the above

Question 20

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

Accepted Answer

A) government pollution charges or taxes 
B) non-tradable emission standards that cap allowable pollution 
C) common law enforcement of property rights,when those rights are well-defined and transaction costs are low 
D) legislated regulations limiting the quantity of emissions allowed by each firm

Exam 42: Difficult Environmental Cases and the Role of Government