Environmental Economics

Refer to Table 3.2. At a market price of $4.00, what is industry supply?

48 units

Refer to Figure 4.5. If the market consists of Homeowners A,B, and C, the aggregate willingness to pay to reduce CO2 concentration to 80 ppm is ______.

$140/year

In the figure the marginal cost of producing the 500th unit of output is _____.

$550

Refer to the figure. If the damaging firm is emitting at the uncontrolled emissions level but is required to compensate damaged firms and individuals, the amount of that compensation would be _____.

(b+c+d)

Refer to Figure 7.1. Because of a reduction in air pollution, a farmer has experienced the shift in supply curve represented by the change from S1 to S2. If price is p1, one way of estimating the value of the reduced pollution in terms of increased production is _____.

(q2-q1)p1 (a+b+c+d+e)-(a+b+c) (d+e)

A oil refinery plant has requested permission from the community to expand. The expansion is likely to increase the number of deaths in the community due to increased rates of cancer. The number of deaths and their associated probabilities is revealed in the table. What is the expected number of deaths?

.33

The rate of heating due to global warming is expected to be about ______ per decade.

.5 degrees C

Voluntary recycling programs began in the _____ and the first one was in _____.

1970s; Oregon

The Clean Water Act, which has been primarily aimed at point source water pollution, has moved the United States ______ of the way toward zero-discharge levels for point sources.

50-60%

When market price is $16, aggregate demand is _____.

7 units

Refer to Figure 4.5. If the market consists of Homeowners A, B, and C, the socially optimal level of CO2 concentrations is _____.

70ppm

When you enjoy the view of your neighbor's prize-winning garden, this is an example of _____.

a positive externality

Global plans for emissions reductions require that we follow a strategy for assigning responsibility for emission reduction. If global policy assigns reductions according to energy efficiency, the largest reductions would come from ______.

China

In the United States, environmental impact analyses are mandated by the _____.

National Environmental Policy Act (NEPA)

In the table, social MWTP equals private MWTP plus external benefits from production. In this market, the socially efficient level of output is _____.

Q4

The 1977 Clean Air Act Amendments differentiated between areas labeled _____ and _____ with different technology based emissions standards.

PSD areas; nonattainment areas

Which of the following environmental policy issues would be considered a macroeconomic concern?

Potential trade offs between environmental protection and GDP growth

The materials balance equation can be written in all of the following forms except ______.

TM = VM - RM

Under what circumstances would a firm with more than one source of emissions minimize its total costs of abatement by setting abatement levels equal at each source?

When each source has identical marginal abatement cost structures

A centralized policy requires that ______.

a controlling administrative agency be responsible for determining what is to be done

When people can negotiate with each other to come up with mutually satisfactory ways to deal with environmental externalities with little or no involvement of the government this is referred to as _____.

a decentralized approach

The Environmental Protection Agency (EPA) has estimated that for every 1 percent increase in UVB radiation, basal-cell and squamous-cell cancer cases increase by 1 and 2 percent respectively. This is called _____.

a dose-response relationship

In terms of human scale, radioactive waste is essentially _____.

a persistent pollutant

In the figure, the curve in (a) represents _____.

a production possibilities curve a trade-off between the production of market goods and environmental quality combinations of outcomes given a fixed endowment and technology

One way to reduce materials intensity in the production of goods is _____.

a shift away from the consumption of tangible goods, but toward services reducing the amount of packing in consumer products increasing online billing and payments

Contingent valuation is _____.

a survey approach asking consumers to answer questions regarding their willingness to pay

Single stream recycling refers to _____.

a system where recyclable items are collected from consumers in a single container and sorted at the recycling facility

Averting costs are _____.

a type of revealed preference purchased market goods that affect a consumer's exposure to the ambient environment one way to estimate willingness to pay

As a specific approach to reducing the impact of green house gasses, adaptation refers to ______.

adjustments by future generations to reduce the negative impacts of temperature increases

Some of the costs that are not measured when employing direct damage measures from pollution are _____.

averting costs

_____ economics is an example of a subdivision of natural resource economics.

agricultural mineral energy

One important characteristic of all marginal cost curves is that _____.

although they initially decline, they eventually increase

A(n) ________ shows how damages are related to the concentration of a waste product contained in the ambient environment.

ambient damage function

The 1972 Water Pollution Control Act Amendments changed the policy approach of water pollution control from one of ______ to one of ______.

ambient quality; technology based effluent standards

International agreements come in several forms and environmental agreements have made use of each form. One such form is a treaty, which is _____.

an agreement where countries define a problem and agree to address it, and detail all of the specific actions that will be undertaken including the signatories and institutions that are responsible for that action

nternational agreements come in several forms and environmental agreements have made use of each form. One such form is a protocol, which is _____.

an agreement where countries define a problem and agree to address it, and detail all of the specific actions that will be undertaken including the signatories and institutions that are responsible for that action

International agreements come in several forms and environmental agreements have made use of each form. One such form is a convention, which is _____.

an agreement where countries define a problem and agree to address it, without specifying what actions will take place

A common pasture on which anyone is allowed to freely graze sheep or cattle is an example of _____.

an open access resource

n order for multinational agreements to be socially efficient, they need to _____.

apply emission reduction goals according to the equimarginal principle

Refer to the figure. The graph represents a bilateral transboundary pollutant and the economics of reaching an agreement between two countries, Country A and Country B. The total reduction in damages when Country A considers damages it causes in Country B and produces at the globally efficient level of emissions is _____.

area (c+d+f)

Refer to Figure 5.1. The change in damages associated with a shift from MD1 to MD2 at an emissions level of e1 is

area a

Refer to Figure 5.1. Total damages associated with damage curve MD1 at an emissions level of e1 is

area b

The figure shows the impact of technological change on the marginal cost of producing a certain good. Producing Q* units with the new technology reduces total cost by an amount equal to _____.

area b

Refer to the figure. The graph represents a bilateral transboundary pollutant and the economics of reaching an agreement between two countries, Country A and Country B. The added attainment costs for Country A to consider damages it causes in Country B and produce at the globally efficient level of emissions is ______.

areas (d+f)

In Figure 4.2 the net social value is equal to _____.

areas a+b

Refer to Figure 5.1. Total damages associated with damage curve MD2 at an emissions level of e1 is

areas a+b

The figure shows the impact of technological change on the marginal cost of producing a certain good. With MC1 the total cost of producing Q* units is equal to_____.

areas b+c

Willingness to pay is graphed _____.

as a curve that slopes downward as quantity increases

Benefit-cost analysis has been criticized _____.

as a means of allowing public agencies to justify ever-larger budgets because it limits political discussion and decision-making about prospective public projects and programs as a way of limiting spending on public programs due to the difficulty of measuring benefits relative to costs

The practice of estimating willingness to accept _____.

asks how much compensation people require for a reduction in environmental quality

One of the theoretical ideas of natural resource economics is that the earth's _____ is a natural resource under threat of depletion.

assimilative capacity

Afforestation is an example of ______.

augmenting the CO2 absorption capacity of the ecosystem

International agreements regarding the use of natural resources _____.

began when countries sought to agree on navigation rules to cover ocean passages

While technology based effluent standards help reduce point source emissions, the 1987 Water Quality Act has sought to control non-point source emissions through ______.

best management practices

The cost of illness approach measures _____, in order to estimate the benefits of pollution control in terms of reduced health related costs.

both direct and indirect costs of illness

Between the 1977 Clean Air Act Amendments and the 1990 Clean Air Act, a major policy innovation took place when the EPA allowed _____.

both emissions trading among sources of pollution and emission reduction credits to be traded both between firms and intra-firm

Which of the figures reveals a marginal damage curve that displays a threshold?

both figures (a) and (b)

An example of social forces that exist enabling voluntary action to be effective is _____.

both moral suasion and informal community pressure

Differentiated control of pollutants allows for different technology based effluent standards between _____.

both new and existing sources of pollution and nonattainment regions and prevention of significant deterioration regions

Refer to the figure. Although, the U.S. has made significant progress in decreasing emissions per mile, _____ continues to grow.

both number of vehicles and average miles traveled

The quantity of CO2 emissions depends on the following factors _____.

both population; GDP per capita and energy efficiency; CO2 emissions per energy used

The primary means of reducing warming associated with the Greenhouse effects is/are _____.

both reducing the output of GHG and augmenting the GHG absorbing capacity of the natural world

Two incentive based programs that might be considered to control GHG are ______.

cap and trade programs; emission taxes/charges

There are often economic efficiency trade-offs between centralized and decentralized environmental regulation. When emissions from each state mix uniformly with emissions from other states so that damages affect each state equally, ______ is clearly more efficient.

centralized policy

Valuing children's health through willingness to pay methods is complicated because _____.

children may be more impacted by environmental pollution than adults children are not capable of offering WTP information on their health some adults have been found to value the health of their children more than their own

The United States and other countries have a long history of using ______ to control emissions. This approach will increase the cost of controlling Greenhouse Gasses.

command and control policies

Examples of incentive based programs include all but ______.

command and control programs

Pollution control policies are of special importance to underdeveloped countries. Many have embraced ______ policy approaches along with heavy reliance on ______.

command and control; voluntary pollution control

A small coastal community with the power to control access to its scallop fishery is an example of _____.

common property rights

_____ is a type of risk analysis that focuses on looking at different policy options and the levels of risk they may entail.

comparative risk analysis

When people are continuously exposed to a drinking water pollutant, we would call this type of pollution _____.

continuous emissions

Although there are many types of waterborne pollutants, policy tends to differentiate between ______.

conventional, non-conventional, and toxic pollutants

Private costs are _____, while social costs are _____.

costs experienced by the consumer making the decision; all of the costs of the action

When estimating the benefits of improved environmental quality, the practice of discounting _____.

decreases the relative value of programs that produce benefits far into the future

_____ is the common term for negative impacts produced by environmental pollution on people in the form of health effects and visual degradation as well as negative impacts on the ecosystem.

damages

There are often economic efficiency trade-offs between centralized and decentralized environmental regulation. When emissions from sources in each state only produce damages within that state, _____ is clearly more efficient.

decentralized policy

Refer to Figure 4.5. If the market is reduced to Homeowners A and C, aggregate willingness to pay for all CO2 levels _____.

declines

A with/without analysis of the impact of the 1990 Clean Air Act reveals that several categories of air pollution have _____ as a result of the legislation.

decreased

National emissions for major air pollutants in the U.S. have _____ since the 1980s.

decreased

CO2 is the most important of the greenhouse gasses that we have in our atmosphere. From 2000 to 2012, emissions of CO2 have been _____ in the U.S. and _____ globally.

decreased; increased

In Figure (a), we can see that as the marginal damage curve rises, representing increased damages for every unit of emissions, the socially optimal level of emissions

decreases

Production and consumption of green goods shifts the marginal abatement cost curve ______.

downward

In the U.S. courts, those seeking to be compensated for damages due to environmental pollution must _____.

demonstrate that the emissions at issue caused the damages that are presented demonstrate that the emissions at issue came from the specific defendant file an action within a specified period of time (typically 2-3 years)

Many environmental issues are local or regional, however some are international or global in scope. An example of a global environmental issue is _____.

destruction of the stratospheric zone greenhouse gases global warming

As a partial result of the Montreal Protocol, scientists predict that the hole in the ozone will be substantially ______ by ______.

diminished; 2070

When we drive our cars, we get the _____ of transportation services, while others experience the detrimental effects such as pollution and congestion which environmental economists refer to as a(n) _____.

direct benefit; negative externality

High levels of ______ are associated with high-quality water, this water supports domestic water supply and quality recreational activities.

dissolved oxygen

In order to preserve biodiversity, the United States has passed the Endangered Species Act. Although this act has had some success in preserving individual endangered species, it is relatively ineffective at preserving _____, because this requires preservation of a relationship among a large number of species.

diversity

Air pollution causes materials damages to exposed surfaces. Which of the following is not considered when estimating materials damage values?

dose response relationships maintenance costs early replacement costs

What are the criteria used by environmental economists to evaluate environmental policies.

efficiency, equity, fairness

For a policy to be ______ it must be ______.

efficient; cost effective

The materials balance equation indicates that one way to reduce municipal solid waste is to reduce total materials used. Total materials used can be reduced by _____.

either reducing economic activity or reducing materials intensity

Suppose both a chemical company and a commercial fishery operate on the same river. According to the Coase theorem the socially efficient level of emissions can be reached through bargaining between the two parties if _____ has the right to use the river.

either the chemical company or the fishery

After the state has established a total maximum daily load for a body of water and after that load has been distributed among the sources of emissions, a system of ______ can be developed to encourage cost effectiveness.

emissions trading

In the United States SO2 program, emissions permits are tradable and managers of a particular plant can _____.

emit at or below the plant's allowable level and hold on to any excess permits emit below the plant's allowable level and sell off any excess permits emit above the plant's allowable level and purchase permits to cover the excess emisisons

______ content standards require that all materials-using products manufactured or sold contain some specified percentage of ______.

minimum; recycled material

_____ determine the specific relationship between ambient pollution exposure and adverse health effects.

epidemiologists

The accident release of oil into the Gulf of Mexico or the nuclear accident at Three Mile Island are considered _____.

episodic emissions

An accidental oil spill is an example of a(n) _____ emission while municipal treated waste is an example of a(n) _____ emission.

episodic; continuous

For a firm with more than one source of emissions, the ________ states that the total costs of abating a given abatement target will be minimized when the marginal costs of abatement are ________ across sources.

equimarginal principle; equalized

One policy solution to maintaining species and biodiversity is to ______.

establish a more complete system of property rights over genetic resources

Industrial wage studies that have been conducted reveal _____.

estimates of the value of a statistical life an estimate of the benefits people might receive from reducing pollution related premature death

Peoples' willingness to pay for environmental quality and amenities that they may never experience is called nonuse value. All of the following are explanations of nonuse value except _____.

experience value

Risk assessment consists of several separate steps, namely _____.

exposure analysis, dose-response analysis, risk characterization

As part of an environmental risk assessment, scientists and epidemiologists engage in dose-response analysis to determine the relationship between _____.

exposure and impacts

When production results in environmental degradation, private firms do not take the _____ into consideration when making their output decisions resulting in _____.

external costs; a market failure

Continued extraction of a non-renewable resource can be sustainable over time if managed properly.

false; non-renewable resources will eventually deplete.

Regulations to control mercury emissions from power plants have been in contention for well over a decade at the ______ level.

federal

The Clean Air Act of 1970 introduces _____ over air-pollution matters introducing uniform ambient standards, technology based effluent standards and stricter emissions standards for automobiles.

federal control

Which figure represents a greater total abatement cost than total damage cost at the socially optimal point of emissions?

figure (b)

Which figure represents a marginal damages curve with a threshold ?

figure (b)

Which figure represents a social optimum at e*?

figures (a), (b), and (c)

New source bias creates incentives for _____.

firms to hold on to older plants slowing the rate of adoption of new pollution abatement technology intense battles over how regulators define "new" versus "existing" plants

Policies that can be readily adapted to new information about damages, technological innovation and changing economic or social conditions are considered ______.

flexible

_______ organizations are more likely to respond to incentives that discourage pollution.

for profit not for profit government

_______ organizations are more likely to respond to incentives that encourage pollution.

for profit not for profit governments

Environmental quality improvements are a public good so we should expect _____.

free riding

Answers to willingness to accept questions are typically _____.

greater than their willingness to pay responses for the same item

Goods that give the same level of pleasure as ordinary goods but that involve less environmental damage in either their production, use or disposal are known as _____.

green goods

Often countries are negotiating many international issues at the same time that they are considering agreements regarding environmental issues. If they are trying to establish a reputation as _____, their position on an environmental issue may seem inconsistent with self interest.

hard bargainers

Point-source pollutants _____.

have a well defined point of discharge

It is possible to estimate _____ by considering information about reductions in worker productivity and medical expenditures.

health damages

Refer to the figure. MAC1 represents a mis-estimation of abatement costs. True abatement costs are MAC2, however the regulatory agency believes that the costs are represented at MAC1 and sets policy accordingly. Due to this error, emissions are ______ than the socially efficient level and damages are ______ than the socially efficient level.

higher; higher

New source bias is defined as _____.

holding new sources of pollution to stricter standards than existing sources.

Negligence is a form of common law that ______.

holds polluters responsible only if they have not taken steps to avoid the damages

Table 1: Benefits and costs of a local environmental impact on a 3 person community. Table 1 represents

horizontal equity

The height of the marginal damage curve at a particular level of emissions shows

how much total damages change if there is a small change in the quantity of emissions.

Economics is the study of how and why individuals and groups make decisions about the use and distribution of ______.

human and non-human resources

Initially, in order to reduce the damages associated with CFCs, manufacturers began using _____.

hydroflourocarbons, which cause less environmental damage

When there are substantial differences among sources and technologies in terms of the costs of reducing greenhouse gasses (GHG), the use of _______ is more cost effective than the use of ______.

incentive based policies, command and control

Any economic system will produce destructive environmental impacts if the ________ within the system are not structured to avoid them.

incentives

People make the decision to pollute or not based on ______.

incentives social institutions economic institutions

One criterion for evaluating environmental policies is whether or not they generate _____ for individuals, firms and industries to engage in _____.

incentives; R&D activities

When examining environmental policy outcomes and consequences, equity considerations can be examined at the level of ______.

income, region, international

The materials balance equation asserts that, given a certain quantity of residuals, if the flow going into one environmental medium is reduced (e.g., water) the flow going into the others (air and/or land) must _____.

increase

Transaction costs typically _____ with the number of parties involved.

increase

Over the last several decades, the proportion of the U.S. population that is served by secondary or tertiary water treatment facilities has _____.

increased

Municipal Solid Waste (MSW) includes trash or garbage from homes, businesses and institutions. Over the past last 50 years, the amount of MSW that is recycled has _____.

increased dramatically

The use of virgin materials can be reduced by _____.

increasing the rate of reuse

As major U.S. federal environmental legislation has slowed, ______.

individual states have played a growing role in environmental policy

The determination of how much an individual is willing to pay for a good or service is comprised of both _____ and _____.

individual values; ability to pay

Estimating the value of environmental quality through housing prices may be more accurate than industrial wage studies because _____.

industrial wage studies estimate the value of health benefits, but not the aesthetic impacts of environmental quality

Because new car certification programs can only control emissions from new cars, the federal government required that states with severe air pollution problems initiate programs that inspect individual cars. These programs are called _____.

inspection and maintenance programs

Liability laws are one of the ways to ______ an externality.

internalize

The Kyoto Protocol came into force in 2005 and was the first _____ effort to address GHG reduction and control.

international

Both renewable and nonrenewable resources can have _____ trade-offs.

intertemporal

The trade-off that exists between harvesting as much as possible of a renewable resource today versus waiting for the future exemplifies the _____ of many natural resource management issues.

intertemporal dimension

The engineering focused approach of technology based effluent standards _____.

is subject to political interests while the EPA is required to make engineering decisions is substantially undermined the requirements of monitoring and enforcement is likely to be cost in-effective, and not consistent with the equimarginal principle

Marginal willingness to pay _____.

is the consumer's additional willingness to pay for one more unit of the good

The Montreal Protocol is considered successful because _____.

it has found wide agreement among the nations of the world it created conditions that satisfied both developed and developing nations it provides a model for future international agreements

_____ is an environmental media.

land water air

A tax on virgin materials charged to all manufacturing firms would _____.

lead to increased recycling in a way that satisfies the equimarginal principle

Environmental economics is the application of the principles of economics to the study of the use of environmental resources. As such, it draws mostly from the field of _______.

microeconomics

rimary standards that are established in the 1970s CAA are concerned with _____.

levels of pollution that threaten public health

Emissions trading for water pollutants may be more complex than emissions trading for air pollutants. Trading networks will be _____.

limited to sources discharging into particular bodies of water

The 1980 Comprehensive Environmental Response, Compensation and Liability Act allows for the calculation of restoration costs in order to determine damages. Some of the difficulties of calculating restoration costs include _____.

ll of the above are difficulties with determining restoration costs

A classic example of a non-cumulative pollutant is _____.

loud music

In order to implement policies that encourage a socially efficient levels of recycling in firms that use virgin materials, the goal would be to achieve equality across industries and materials in terms of _____.

marginal recycling costs

External costs can drive a wedge between the _____ and the _____ resulting in a market failure.

market supply curve; social marginal costs

Temperature inversions over urban areas are an example of _____.

meteorologic phenomena confounding the link between emissions and ambient air quality

Once we recognize that there is a strong possibility that global climate change will occur, there are two fundamental paths to address the problem: _____ and/or ______.

mitigation; adaptation

Two main steps in enforcement are _____.

monitoring and sanctioning

The economic approach to issues of the environment can be directly contrasted with the ________, while the former relies on analytic models and incentives to explain environmental quality the latter interprets environmental degradation as a result of ________.

moral approach; unethical behavior

Best Available Technology (BAT) is generally considered ______ than Best Practicable Technology (BPT).

more stringent

When emissions are mixed and not flowing from a single source, the problem of enforcement to maintain ambient quality is _____.

much more complex

The available enforcement mechanisms are ______ at the international level compared to national level.

much weaker

The reason it is so difficult to seek solutions to protect the global environment is that _____.

nations are impacted by global pollution differently and therefore have different incentives to protect global resources. nations contribute to global pollution at different levels and therefore require different incentives to alter their practices. there is a great deal of uncertainty regarding the impact of emissions on shared global resources.

The study of nature in its role as a provider of raw materials is called _____.

natural resource economics

Although the dividing line between the two is blurring generally speaking, _____ is concerned with resource extraction and _____ is concerned with environmental degradation.

natural resource economics; environmental economics

The socially efficient scale maximizes the net social benefits from a project because _____.

net social benefits are maximized where MAC = MDCq

When the rate of output is at the socially efficient level, _____.

net social value which is equal to total WTP minus total costs is as large as possible

When a resource has no owner _____.

no one has a very strong incentive to see that it is not degraded in quality

Urban storm water runoff is a type of water pollution that is called _____.

non-point source pollution

The study of what ought to be such as determining the socially efficient level of emissions is known as

normative economics

_______ would include a study of what the economic penalties for water pollution should be.

normative economics

Determining a target level of environmental quality is an example of _______.

normative policy analysis

If social values are not reflected in the market values determined by the market demand and market supply curves, the competitive market equilibrium output will _____.

not be the socially efficient level of output

The EPAs Clean Air Interstate Rule (CAIR) was rejected by the federal courts because _____.

of concerns over permit concentrations developing in upwind states

In the long run, residuals discharged by producers plus residuals discharged by consumers must be equal to the materials and energy extracted from the natural environment. The fundamental balance equation states that this is also equal to the _____.

output of goods and services plus production residuals minus recyclables

Moral considerations are often a part of the criteria for evaluating public policy. What are these moral considerations?

polluters should not be rewarded for terminating environmentally damaging behavior those who cause the problem should bear the burden of alleviating it polluting is an immoral behavior

Because of the lack of markets, many countries have sought to develop an innovative property rights plan called ______.

payment for environmental services

Vertical equity treats _____.

people in different circumstances differently

Horizontal equity treats _____.

people in the same circumstances identically

______ pollutants are pollutants that remain for a longer period of time, either because they are nondegradable or because the rate of degradation is very slow.

persistent

The _____ of a policy is not a criterion used to evaluate a pollution control policy.

political acceptability

The concept of strict liability means that _______.

polluters will be held responsible for damages regardless of the situation

Describing and explaining economic events that have taken place in the real world is known as

positive economics

Each of the following is a step in conducting a benefit-cost analysis of a project, except _____.

prepare a clear overview of the project including specifics about scale and perspective estimate the social costs and benefits of the inputs and outputs of the project quantitatively describe the inputs and the outputs of the program

In setting national ambient air quality standards, the 1970 CAA set two levels of standards for criteria pollutants. What are they?

primary and secondary standards

Wastewater treatment plants engage in different levels of treatment for municipal water. The different degrees of treatment are designated _____.

primary, secondary, and tertiary

Public policy makers typically do not have totally accurate information about the pollution control costs that a firms or industries face in the real world. Accurate information regarding the costs of adaptation are, for the most part, _____.

private information

The rate of technological change for environmental improvement may be too slow because ______.

private markets typically undersupply public goods

The European Commission adopted a mandatory directive electronic and electrical equipment requiring producers to assume responsibility for their e-waste throughout the lifecycle of the product. This is an example of a _____.

producer take-back program

An environmental program is _____ if the net effect of that policy has proportionally _____ effect on low-income people as on high-income people.

progressive; greater

Which project offers the greatest present value at a discount rate of 10%?

project a

In order for a property rights approach to produce an efficient level of environmental pollution, the following conditions must be met _____.

property rights must be well defined, enforceable and transferable there must be a system for efficient negotiation about property rights to be negotiated there must be a set of markets for environmental assets

An environmental program is _____ if the net effect of that policy has proportionally _____ effect on low-income people as on high-income people.

proportional; the same

the more ______ an environmental good is, the ______ likely property rights can be used to achieve the socially optimal level of emissions.

public; less OR private; more

In the figure, the socially efficient level of output is equal to _____.

q*

Refer to the figure. Without government intervention, the market depicted would produce ______ units of CFCs at a price of ______.

q1;p1

Refer to the figure. With government imposing restrictions on total production of q2 , the market depicted would produce ______ units of CFCs at a price of ______.

q2;p2

Cap and trade is a _____ based plan. A limit is placed on emissions and prices are established in emissions permit markets. Emission taxes are a _______ based policy. A fee on emissions is set and the quantity of emissions is adjusted as polluters react to the fee.

quantity; price

In the materials balance equation written in the following form with VM = TM (1-r), r is defined as _____.

rate of reuse and RM/TM

According to the fundamental balance equation, how can M, raw materials and energy extracted from the environment, be reduced?

reduce G, the amount of goods produced reduce Rp, residuals from producers reduce (Rrp + Rrc), recyclables from both consumers and producers

The CAFE standards in the U.S. were originally introduced in order to _____.

reduce petroleum imports to the U.S.

Command and control policies refer to _____.

regulations and laws that directly/indirectly specify pollution control technology

Liability laws are an effective way to incentivize efficient pollution solutions when _____.

relatively few parties are involved causal linkages are clear damages are easy to measure

Although TBESs are emissions standards, because specific technology is used to determine the emission standard, firms are often _____.

reluctant to take a risk and explore cheaper and alternative technologies discouraged from practicing pollution prevention unintentionally encouraged to use the technology that was used to set the standard

Nonrenewable resources are those for which there is no process of _____.

replenishment

Opportunity cost _____.

represents the maximum value of other outputs that could have been produced with the same resources

A technology forcing policy is one that ______.

require pollution control targets that force firms to innovate in order to meet the targets and experience reasonable cost increases.

One of the main provisions of the Montreal Protocol is _____.

requirements for individual countries to phase out the production and consumption of designated substances a multilateral fund where contributions from industrialized countries are used to support the activities from developing countries toward achieving controls assigned in the agreement A provision for trade restrictions, banning trade in the designated substances between signatories and nonsignatories

When a new production technology is invented that results in production of smaller amounts of residuals per unit of output produced, this is called reducing the _____.

residuals intensity of production

technological progress

results in a downward shift in the marginal costs curve

There are two categories of willingness to pay estimation methods and these are called _____.

revealed preference and stated preference approaches

Refer to the figure. A program that reduces emissions from the uncontrolled level of e1 to emissions level e2 _____.

reveals net benefits of (a + b) - (b)

If two projects with uncertain outcomes had the same expected value, but project A had two similar but uncertain outcomes with similar probabilities of occurrence while project B had a low probability of a disaster and a high probability of a positive outcome a _____ decision maker would choose Project A.

risk averse

The Kyoto Protocol has been criticized for _____.

setting quantitative limits on GHG without specific regard to future increases in global temperatures focusing on short term goals without consideration of long-term needs insufficient attention to implementation and enforcement

The residuals from production can be reduced by _____.

shifting the composition of output towards low-residual items preventing pollution by reducing the energy inputs required to produce each unit of output reducing the residuals intensity of production

Economic models reveal that the command and control policies such as technology-based effluent standards used to control air pollution are _____.

six times more costly than policies designed to be cost effective

The _____ level of pollution can be negotiated privately based on property rights when only a few parties are involved and the source, amount and type of pollution is clearly identifiable.

socially efficient

Environmental policies have triggered all of the following macroeconomic concerns except ______.

stricter environmental policies are associated with socialism

The Montreal Protocol has been _______ and ozone-depleting substances have _______.

successful; declined

One way to control non-point source emissions is _____.

tax the activities or materials that lead to the emissions, rather than the emissions themselves

The 1980 Comprehensive Environmental Response, Compensation and Liability Act resulted in the US Department of Interior defining the calculation of damages to a valued resource as _____.

te lesser of the lost value of the resource or the value of restoring the resource

Which of the following affect a firm's incentive and ability to replace virgin material in the production with recycled materials?

technology available to sort materials for recycling the transportation of materials to be recycled the reprocessing recycled materials

In economics, the concept of government failure refers to ______.

tendencies within the government that work against efficient and equitable public policy

Nonjoint liability means ______.

that only one party may be held responsible for the damages

Because states compete to attract businesses, some believe that there will be a 'race to the bottom' resulting in lax state policies regarding environmental regulation. Most empirical evidence to date suggests that ______.

the 'race to the bottom' has not taken place

It wasn't until the creation of ______ that a direct Federal role was established for water pollution control.

the Environmental Protection Agency

Refer to the figure. The graph represents a bilateral transboundary pollutant and the economics of reaching an agreement between two countries, Country A and Country B. The amount calculated by (MDT -MDA) represents _____.

the damages experienced by a second party, Country B, from Country A's emissions

One of the most persuasive arguments that the profit motive is not the cause of pollution is ______.

the environmental destruction experienced in countries with Communist regimes

Cross media transfers refer to ______.

the fact asserted by the materials balance equation that reductions of emissions into one media typically result in more emissions into another media, not a total reduction in emissions.

the paradox of sanctioning is ______.

the greater the sanction (fines, jail time, etc) the greater the deterrent, however courts are reluctant to apply large sanctions

A cost effective policy regarding CO2 emissions would ensure _____.

the largest emission reduction for the resources spent

The Trail Smelter case of 1935 was an important case involving a British Columbian metal refinery that damaged farmlands in the United States. This case set an important international precedent referred to as _____.

the polluter pays principle

When two countries engage in a voluntary international agreement, they often invoke some element of _____, which encourages compensation to a polluter who suffers a net financial loss when it limits its omissions to a socially efficient level that considers other damaged parties.

the polluter pays principle

Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the idea that _____.

the polluter should pay

The benefits a consumer acquires from consuming a unit of a good is equal to _____.

the price that a consumer is willing to pay

The policy challenge for episodic emissions is to manage _____.

the probability of accidental discharges

Higher levels of atmospheric CO2 are expected to have a substantial impact on ecosystems, including individual plant and animal species, not just because of the magnitude of change but also because of _____.

the rate of change

There is some evidence that CO2 emissions have been contained within the United States and Europe. One of the main reasons for the decline is thought to be _____.

the recession

In the last 50 years, air pollution problems have become more serious due to _____.

the scale of airborne emissions the variety of airborne emissions the diverse set of damages caused by airborne emissions

The ability of a municipality to send solid waste to a landfill is affected by _____.

the scarcity of sites willing to accept this waste

All of the following are difficulties with relying on moral reawakening to combat pollution control problems, except ______.

the separation of church and state prevents moral influence in policy

Total costs are found by _____.

the sum of the marginal cost for each unit

Human activity can disrupt _____.

the troposphere and the stratosphere

Health states and health indices are often 'monetized,' which means

the value is stated in dollars so that it can be compared with the cost of pollution control

Suppose that the average person in a group of 150,000 people is willing to pay $10 to lower the probability of a random death among members of that group from 10 in 150,000 to 9 in 150,000. Then the total willingness to pay is $10 (150,000) = $1,500,000 is equal to _____.

the value of a statistical life based on willingness to pay

For a single, non-accumulative pollutant, when no threshold exists

the very first unit of emissions has an impact on the environment.

Informal community pressure is considered informal because _____.

there are no statutes or legal means used to assert the pressure

two of the challenges of using equity and fairness to evaluate the effectiveness of public policy are that _____.

there is no agreement on how to determine what is fair and equitable; there are often trade-offs between distribution of benefits and efficiency

The central idea of economic efficiency is that _____.

there should be a balance between aggregate marginal willingness to pay and the marginal costs of production

For certain pollutants with a(n) _______, emissions or ambient quality up to a certain level cause _________ damages.

threshold; no

_____ is not a cause of market failure.

time

The marginal cost curve is affected by _____.

time the price of inputs technology

The choice of a discount rate is influenced by _____.

time preference whether the effects cross generations the rate of inflation

The goal of a contingent value questionnaire when valuing an environmental amenity is _____.

to elicit respondents to reveal the maximum amount they would be willing to pay rather than go without the amenity

For a firm with more than one source of output with differing cost structures, its ________ will be minimized when its ________ are equalized across sources.

total production costs; marginal production costs

California has been a lead state in the area of policy innovation, exemplified by _____.

tradable emissions permits to control air pollution

Globalization is a term used to refer to the changes taking place in the world economy, including all of the following except _______.

trade among nations multinational firms and conglomerates privatization of economic institutions

Given the information in the table, _____ is the cost-effective way to reduce the phosphorous concentration in the Bay of Quinte.

treatment of wastewater from water treatment plants

Due to free riding, public goods are typically _____.

under supplied

With no green house gases at all, the earth would be ______ for human life.

uninhabitable

The technical name for the PAYT (pay as you throw) waste disposal program implemented in Worcester, Massachusetts, that charged a set price for each bag of trash is _______.

unit pricing

The notion of diminishing willingness to pay reveals that as _____.

units consumed increases, willingness to pay for additional units decreases

There are two types of contingent valuation estimates that are practiced _____.

valuing environmental amenities and valuing health outcomes

Option value refers to _____.

valuing the option of being able to experience an environmental asset in the future

Microeconomic topics and studies would include ______.

wage rates in the energy industry

The 1899 refuse act was not an attempt to control water pollution, but an attempt to ensure ______.

water navigation

Under what circumstances would a firm with more than one source of production minimize its total costs of production by setting production levels equal at each source?

when each source has identical marginal cost of production structures.

The likelihood of free riding in the production of environmental quality increases ______.

when the number of parties affected is large

Environmental federalism refers to _____.

whether environmental regulations should be applied at a national level

By definition, a free rider is a person _____.

who underpays for public good relative to the benefits that they receive

The amount that a person would accept in order to be compensated for a small loss in air quality is called their _____.

willingness to accept

In judging whether people from Chicago can justifiably claim that they have been damaged by species endangerment in Africa, the presence or absence of _____ is the economic index used to validate that claim.

willingness to pay

Individual demand curves reflect _____.

willingness to pay

Suppose public authorities were contemplating locating a hazardous waste incinerator in a particular community. If the members of this community offered to pay $25,000 to keep it out of their area, this amount is equal to their _____ for clean air.

willingness to pay

The value of a good or service is measured by _____.

willingness to pay the sacrifice a person experiences in terms of other goods the sacrifice a consumer experiences in generalized purchasing power

A complication associated with estimating willingness to pay through revealed preference methods is _____.

willingness to pay depends on ability to pay individual measures of willingness to pay may underestimate true benefits due to fact that some people may be willing to pay for benefits to others

In order to understand whether pollution control policies have been effective, a ______ analysis examining what emissions were compared to what they would be if policies had not been pursue must be performed.

with/without