ARE 220 - 3
Which one of the following valuation techniques is not based on the value of marketed goods or services?
Contingent valuation
Explicit costs do not include which of the following
opportunity costs
Implicit costs include which of the following
opportunity costs
The present value of $525 received one year from today, assuming an annual rate of return (discount rate) of 5% is
$500
1 out of 1 points If the value of an environmental benefit realized two years from today is $970.20, and the annual rate of return is 5 percent, then its present discounted value is
$880
The primary method of obtaining data for the Contingent Valuation Method is
A survey of a sample of the population
graph shows the demand for a lake with a preexisting environmental quality level (represented by D0) and the price for admission. If there is no policy change to improve the environmental quality of the lake, consumer surplus may be represented by
Area abP
Which one of the following techniques is an example of supply-side economic valuation?
Avoided cost valuation
The Benefit Cost Ratio is estimated as
BCR = Benefits/costs
The value you may derive from knowing a resource is there for future generations is
Bequest value
Which one of the following statements is true?
Discounting will decrease the magnitude of future cost and benefits
An economist estimates the value of a nature preserve by calculating the price premium people pay for houses located adjacent to the preserve. This is an example of what type of economic valuation?
Hedonic Pricing
One method of determining weather or not to invest in a project is the Net Present Value. A project should not be invested in if the
NPV < 0
One method for determining whether or not to invest in a project is the Net Present Value. A project should be invested in if the
NPV > 0
The social welfare criterion used for Benefit Cost Analysis requires that
Net benefits = Total Benefits - Total Costs
The benefit cost radio can be use to determine which projects to fund. A project should be funded if
PVB/PVC > 1
Indirect use of nature could include
Using wetlands as a natural filter for urban drinking water
Among the chief concerns about the use of benefit-cost analysis is that
all of the above
Averting costs as a method for estimating non - market values could include the
all of the above
Direct use values of nature could include
all of the above
It is desirable to value the environment so we have an idea about the
all of the above
Non - use economic values of the environment were identified as
all of the above
Some of the "hidden" costs of implementing an environmental policy include
all of the above
graph shows the demand for a lake with a preexisting environmental quality level (represented by D0) and the price for admission. If there is a policy implemented to improve the environmental quality of the lake, the change in consumer surplus with and without the new policy may be represented by
area abdb
graph shows the demand for a lake with a preexisting environmental quality level (represented by D0) and the price for admission. If there is a policy implemented to improve the environmental quality of the lake, the new consumer surplus may be represented by
area cPd
Travel Cost Methods (TCM) and Hedonic Pricing Methods are
based on revealed preferences
Contingent Valuation Methods (CVM) are
based on stated preferences
If PVB/PVC for a given policy option equals 5.5, this means that
both (b) and (c) are correct
which of the following are reasons economists discount the benefits and costs or projects
both of the above
Which of the following are reasons economists discount the benefits and costs of projects
both of the above / all of the above
graph shows the demand for a lake with a preexisting environmental quality level (represented by D0) and the price for admission. According to the graph, the policy to improve environmental quality
increases demand for visits from e to f.
In the final phase of benefit-cost analysis, one of the steps that is generally conducted is to
determine if an option is feasible
When measuring the incremental benefits of a policy change, economists estimate
either a or b both provide the same result
Developing the marginal social benefit (MSB) or total social benefit (TSB) curves allows economists to
estimate the potential value of an environmental policy
The present value of net benefits (PVNB) is
found as (PVB - PVC)
The classic context for hedonic environmental pricing studies (the source of most analyses) is
housing markets
A "Potential Pareto Improvement" occurs when
society is better off if and only if the gainers could compensate the losers with a little left over.
Which of the following is not identified as a problem with the Travel Cost Method
studies provide nonuse - values only
A technique to estimate the value of a cleaner environment based on averting costs would not include
the cost to install gutters on your home
An example of environmental services that may have a value not considered in the market is
the pollution of fruit orchards by honeybees
If the discount rate is zero
the present and future should be treated equally
A larger discount rate is indicated that
the present is more important than the future.
Which of the following are reasons economists discount the benefits and costs of projects
uncertainty about the future
A discount rate that is less than zero indicates that
we should suffer now because the future is more important the present.
A smaller discount rate is an indication that
what happens in the future is important
