econ 12

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

legitimately lacked moral standing in addition to all the above.

A ___________________ would lead a large greenhouse gas emitter to reduce emissions by less.

lower pollution tax

Some economists argue that if privately owned firms were required to pay the social costs of their pollution, the result would be:

the price of goods will rise and a and b above

Which of the following is viewed as a fundamental building block of the U.S. economic way of thinking?

the principle that a system of voluntary exchange benefits both parties

A pollution charge is a form of tax imposed on

the quantity of pollution that a firm emits.

Some of the leading ecotourism destinations include:

the Caribbean, New Zealand and all of the above

Four companies, Alpha, Beta, Gamma and Delta, are burning coal to produce electricity. As a result, they also produce emissions. In the table below, the first row of shows the total pounds of emissions currently produced by each firm. The other rows of the table show the cost for each firm of reducing emissions by the first 50 tons, the second 50 tons, and so on. The total cost of requiring each firm to reduce its garbage by one third is

$167

The International Ecotourism Society estimates that international tourists interested in seeing nature or wildlife spend over

$450 billion per year.

The challenge of preserving biodiversity,

a nation can protect biodiversity within its own borders and c.

The problem of pollution typically arises in ______________ economies around the world.

high or low-income

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

health injuries and all of the above

Traditionally, policies for environmental protection in the U.S. have focused on __________________ pollutant could be emitted.

setting limits for how much of each

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

spillover

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

steadily improved.

If a steel manufacturer considers the costs of labor and materials, as well as the broader costs of environmental injuries resulting from its manufacturing processes,

it is factoring in the social costs of the pollution it generates.

Why would a typical U.S. business fail to take the social costs of pollution into consideration during the development of their operating strategies?

it isn't required to pay any of the cost of cleaning up its pollution

Which of the following have historically been more willing to sacrifice their environmental quality for some additional economic output?

low incomes and command economies

Around the world, the cities with the dirtiest air and water are typically found in ___________________________ .

low-income countries in Africa and Asia

Rather than arguing over whether the ultimate goal is zero pollution or a reasonable level of pollution, the immediate focus should be to tackle the environmental issues where the _____________________ and the __________________ .

marginal benefits are greatest; marginal costs are least

A pollution charge gives the trucking industry an incentive to reduce its emissions, as long as the _____________ of reducing the emissions is _______________ .

marginal cost; less than the tax

An economist is more likely to identify __________________ as a more efficient and flexible way for society to __________________________ .

marketable permits; allow a limited, declining amount of pollution to occur

The main categories of market-oriented approaches to pollution control are

marketable permits; better-defined property rights; pollution charges.

Environmentalist groups tend to prefer ________________ to ___________________.

marketable permits; pollution charges

Two rubber companies, Boing and Twang, are currently producing along, and polluting, the same river. Both companies are considering whether to install pollution filters on their factories. These filters cost $15 million each. If a filter is installed, there is a benefit of $20 million, but this benefit is divided equally between the two companies. In the absence of any government intervention or agreement between the firms,

neither firm will install a filter

Property rights are the legal rights of ownership on which others are

not allowed to infringe without paying compensation.

Which of the following would be classified as a situation where a third party benefits from a market transaction by others?

City buying 10,000 trees for green space renewal projects.

With respect to the benefits of clean air and water, which of the following would most likely be classified as being relatively easy to value in economic terms?

gains in farming, fishing and tourism

Which of the following would an economist identify as a difficulty relating to environmental command-control regulations?

high degree of inflexibility

As environmental protection increases,

in addition to a and b above, the quality of environmental protection increases.

Two rubber companies, Boing and Twang, are currently producing along, and polluting, the same river. Both companies are considering whether to install pollution filters on their factories. These filters cost $15 million each. If a filter is installed, there is a benefit of $20 million, but this benefit is divided equally between the two companies. If both firms install the filters, then Boing will earn ________ and Twang will earn ________ .

$5 million, $5 million

A country is currently creating 40 million tons of toxic waste per year. The table below shows the marginal costs and benefits of reducing the amount of toxic waste to various amounts. What level of toxic waste should the country reduce to?

10 million tons

A study by the Environmental Protection Agency looked at the costs and benefits of the Clean Air Act from 1970 to 1990. This study found that a middle-range estimate of the health and other benefits from cleaner air was $22 trillion. This amount was about __________________ than the costs of reducing the pollution.

44 times higher

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 more likely to represent a market-oriented policy?

E

When making decisions about what safety systems should be required in cars or airplanes, the ___________________ will only approve rules where the estimated cost per life saved is __________ or less.

Environmental Protection Agency; $3 million

_______________ include both the private costs incurred by firms and also costs incurred by third parties outside the production process.

Social costs

Bringing the nations of the world to act together in addressing environmental issues that spill over national borders requires _______________ between countries with _________________ .

a difficult set of negotiations; different income levels and sets of priorities

Marketable permits work best when there are _____________________ permit holders who are highly interested in trading.

a few dozen or a few hundred

When the quantity of environmental protection is low so that pollution is extensive, then there are usually ______________ to reduce pollution and the ______________ .

a lot of cheap and easy ways; marginal benefits of doing so are quite high

The refundable charge of 5 or 10 cents for returning recyclable cans and bottles works like

a pollution tax incentive to avoid littering.

While the traditional approach of U.S. government policies for environmental protection has had some level of success, some economists are proposing a change to

a range of more flexible, market-oriented pollution control policies.

Market-oriented environmental policies are ________, and __________ will work better in some situations than in others.

a tool-kit; specific tools

One concern that environmentalists have is that market-oriented environmental tools are

an excuse to allow pollution to be maintained or to grow.

In the U.S., the command-and-control environmental laws of the early 1970s, together with the ensuing amendments and updates that have been made to them over time,

are given considerable credit for cleaner air and water in recent decades.

If an externality of pollution exists for all manufacturers in a given industry, then all related social costs

are no longer represented in their supply curves.

The number of people served by advanced wastewater treatment plants doubled between 1968 and the mid-1990s, but because the treatment plants _______________________, the quantity of waste emitted into the water after treatment ___________________ .

became so much more effective; decreased by about one-third

Which of the following is used to describe the full spectrum of animal and plant genetic material?

biodiversity

The problem of pollution arises in primarily ______________ economies around the world.

both a and b

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

both a and b above

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?

both a and b above

Two logging companies are deciding whether or not to cut down a significant portion of a particular forest that both have access too. Both companies understand the environmental consequences of their actions, knowing that they are trading off higher profits for a better outcome from society's point of view. The payoffs facing these companies are given in the table below. From the table, we know that the outcome of this game will be

both companies choosing to cut the forest

Ireland and England both fish in the Irish Sea. If this sea is over-fished, the fish stocks will fall and fish will eventually become extinct. Both countries have to decide whether to fish a lot or a little. The payoffs are given in the table below. The outcome of this game is ________ , which illustrates the _________ .

both countries choosing to fish a lot, prisoner's dilemma

Environmentalist groups act to directly reduce of emissions by

buying marketable emission permits and not re-selling them.

Those firms in the oil refining industry that can reduce pollution __________________ will do so _______________________ .

cheaply and easily; to minimize their pollution taxes

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

costly ways; end up paying the pollution tax.

Market-oriented environmental tools _______________ for firms to take the social costs of pollution into account and ____________________ in reacting to these incentives.

create incentives; allow firms some flexibility

Two logging companies are deciding whether or not to cut down a significant portion of a particular forest that both have access too. Both companies understand the environmental consequences of their actions, knowing that they are trading off higher profits for a better outcome from society's point of view. The payoffs facing these companies are given in the table below. From the table, we know that if Company 2 chooses to cut, Company 1 will choose to ______ the forest. If Company 2 chooses to not cut, Company 1 will choose to ______ the forest.

cut, cut

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

endangered species

Which of the following will need to strike some balance between economic output and environmental quality as a prominent climate change priority?

every country

Why do U.S. economists commonly refer to externalities as an example of market failure?

externalities present a case where markets only consider some social costs

In addition to the current levels of air and water pollution, a list of important environmental issues would most likely include:

extinction of species and all of the above

When a government establishes a marketable permit program to address environmental pollution, it is actually issuing a form of

permit to pollute.

In circumstances involving millions of emitters of small amounts of pollution who have no strong interest in trading, _________________ will typically offer a better choice for achieving desired reductions of environmental pollution levels.

pollution charges

Certain schools of economic thought suggest that a _____________ would reduce pollution in a __________________, when compared to command-and-control regulation.

pollution tax; flexible, more cost-effective way

Because of the nature of the comprehensive environmental laws adopted during the late 1960s and early 1970s by the United States government, these laws are typically referred to as ____________________ .

positive regulations

Marketable permits can be viewed as a form of improved _______________.

property rights

The objective of imposing a higher pollution tax is to

provide adequate incentive for firms to reduce their emissions by more.

Which of the following is an example of economic output that can injure the environment?

radio-active waste leaking into a river, and all of the above

The comprehensive environmental laws adopted during the late 1960s and early 1970s by the United States government

stipulated mandatory use of particular pollution-control technologies.

If a government chooses a system of marketable permits as its environmental managing tool, the reduction in pollution will

take place in the firms where it is least expensive to do so.

Which of the following has become the least willing to sacrifice their environmental quality for some additional economic output?

the European Union

A beekeeper decides to locate her business on a plot of land that is between an apple orchard and an elementary school. A positive externality that can result is

the bees helping to pollinate the orchard, leading to more fruit.

If a government wants to establish a marketable permit program, it must begin by determining

the overall quantity of a certain pollutant that will be allowed.

A beekeeper decides to locate her business on a plot of land that is between an apple orchard and an elementary school. A negative externality that can result is

the possibility of the bees stinging the students at the school.

Why was the Clean Air Act amended in 1990?

to reduce sulfur dioxide emissions from electric power plants to half of 1980 levels