APEC 3012 Quiz 5-9

A shortcoming of direct market price analysis is Markets for the good in question may not exist Market prices may not reflect all the benefits of a good Market prices may not reflect all the costs of a good All of the above are shortcomings of direct market price analysis

All of the above

In private markets, the price of land typically reflects The present discounted value of the future net benefits of the land The willingness to pay of whoever values the land the most The value of land in its highest valued use All of the above

All of the above

Land prices will NOT reflect the highest valued use of land if: Land is taxed Land use externalities exist Land network effects exist All of the above

All of the above

Which of the following policies would increase the recycling ratio for newspapers? A tax on the use of non-recycled (virgin) paper A subsidy for newsprint recycling equipment A tax on newspapers subscriptions. All of the above would increase the recycling ratio

All of the above

Suppose you are growing trees for timber. To maximize profit, when should the trees be harvested? (Note: "maturity" here refers to maximum size) Before they reach maturity At maturity After they reach maturity

Before maturity

An Environmental Impact Analysis of Environmental Impact Report: Should be done by an economist Describes the environmental impact of a proposed policy. Is the same thing as a cost-effectiveness analysis Is rarely required by law

Describes environmental impact

An important event in the history of Contingent Valuation was: Creation of the Environmental Protection Agency in 1970 Passage of the Endangered Species Act in 1973 The Exxon Valdez spill in 1989 The Chernobyl Disaster in 1986

Exxon Valdez

Both gasoline taxes and CAFE standards tend to increase driving because of the "rebound effect". True False

False

CAFE standards at gas taxes both have the effect of reducing carbon emissions and local air pollution. True False

False

Contingent valuation questions should be both incentive compatible and non-consequential. True False

False

Economic models of resource extraction predict rising prices and falling extraction rates

False

Suppose you own an oil well. You learn that the price of oil is likely to be lower in the future than you had expected. To maximize profit, you should increase production because your user costs have decreased. True False

False

Total solar power generation exceeds total wind power generation in the US by a wide margin. True False

False

If a forest becomes more valuable for carbon sequestration: Optimal harvest rotations should be longer. Clear cutting should replace selective cutting Timber exports should increase Recreational activities should be prohibited.

Harvest rotations should be longer

Economists say "Cartels contain the seeds of their own destruction" because: Cartel members are untrustworthy people Cartels will be broken up by the SEC Cartel members have the incentive to cheat on their agreement with the other members Matt Damon will infiltrate the operation and report you to the Feds

Incentive to cheat

Which is a reasonable assumption for an economic model of mineral extraction? Increasing marginal extraction costs Decreasing marginal extraction costs An infinite supply of easy to extracted material Increasing quality of extracted material

Increasing marginal extraction

Suppose you are growing trees to sell for timber and you learn that harvesting costs have decreased. What will happen to the optimal length of rotation for your trees? It will increase. It will decrease It won't change It will increase for the first rotation and then decrease back to normal levels

It will decrease

The net social value of the benefits produced by a unit of land are known as: Land network benefits Land rent Per-acre market price Stumpage value

Land rent

Timber harvests on Forest Service in the United States: Are higher now than in the 1970s Are lower now than in the 1970s Are about the same now as in the 1970s

Lower now

In the United States, forest management of public lands has become relatively less oriented towards timber production and more oriented towards: Mining Agriculture Commercial building development Recreation and ecosystem health

Recreation and ecosystem health

In "A Market Approach to Land Preservation" the authors discuss the use of TDRs. What are TDRs? Transportation Determination Requests Transferable Development Rights Transfers of Development Resources Time Domain Requests

Transferable development rights

"Eminent domain" refers to governmental power to appropriate private land for public use. True False

True

In RFF #34 "Renewable Sources of Electricity" the authors argue that fossil fuels enjoy an unfair advantage because the producers of this type of electricity do not pay for the pollution costs imposed on society. True False

True

In recent years, use of natural gas in electricity generation in the United States has been increasing, while the use of coal has been decreasing. True False

True

Indirect Market Price Analysis can be used to value natural resources by observing activity in related markets. True False

True