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Environmental Economics 4th Canadian Edition By Field Test Bank
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Environmental Economics 4th Canadian Edition By Field Test Bank
Description
WITH ANSWERS
Environmental Economics 4th Canadian Edition By Field Test Bank
c2
Student: ___________________________________________________________________________
| 1. | Mineral stocks, fisheries and water are all examples of ________.
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| 2. | The stock of natural and environmental resources that sustain ecosystems, the economy and the well-being of individuals is referred to as ________.
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| 3. | In the phrase natural capital, the word capital captures the economic concept that nature is ________.
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| 4. | 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.
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| 5. | 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 ________.
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| 6. | The residuals from production can be reduced by ________.
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| 7. | Low-phosphate detergents, mercury-free thermometers and energy-efficient appliances are all examples of ________.
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| 8. | As long as the capacity of the earths atmosphere to absorb emissions of CO2 is not exceeded, CO2 is a(n) ________ pollutant. Once the capacity of the atmosphere to absorb CO2 is exceeded, it becomes a(n) ________ pollutant.
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| 9. | An accidental oil spill is an example of a(n) ________ emission while municipal treated waste is an example of a(n) ________ emission.
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| 10. | Continued extraction of a non-renewable resource can be sustainable over time if managed properly.
True False |
| 11. | A living resource can become non-renewable if the rate of harvest exceeds the growth rate of the resources stock.
True False |
| 12. | It is more difficult to develop and administer control policies for point source pollutants than it is for nonpoint source pollutants.
True False |
| 13. | Land is one of the three components that comprise natural capital. List the other two components discussed in the textbook and give one example of each.
|
| 14. | Define the terms renewable resource and non-renewable resource and give one example of each type.
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| 15. | Discuss why using a Zero Population Growth (ZPG) strategy to reduce output and/or to halt the rate of growth of output does not guarantee that the environmental impacts of production will be controlled.
|
| 16. | List one example each of a local, regional and global pollutant.
|
c2 Key
| 1. | Mineral stocks, fisheries and water are all examples of ________.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #1 Learning Objective: 02-01 Describe the three components of natural capital and give specific examples of each type. |
| 2. | The stock of natural and environmental resources that sustain ecosystems, the economy and the well-being of individuals is referred to as ________.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #2 Learning Objective: 02-01 Describe the three components of natural capital and give specific examples of each type. |
| 3. | In the phrase natural capital, the word capital captures the economic concept that nature is ________.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #3 Learning Objective: 02-01 Describe the three components of natural capital and give specific examples of each type. |
| 4. | 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.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #4 Learning Objective: 02-02 Explain the intertemporal trade-offs with natural capital use. |
| 5. | 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 ________.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #5 Learning Objective: 02-03 Describe ways to reduce residuals from the economy. |
| 6. | The residuals from production can be reduced by ________.
|
| Accessibility: Keyboard Navigation Difficulty: Moderate Field Chapter 02 #6 Learning Objective: 02-03 Describe ways to reduce residuals from the economy. |
| 7. | Low-phosphate detergents, mercury-free thermometers and energy-efficient appliances are all examples of ________.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #7 Learning Objective: 02-03 Describe ways to reduce residuals from the economy. |
| 8. | As long as the capacity of the earths atmosphere to absorb emissions of CO2 is not exceeded, CO2 is a(n) ________ pollutant. Once the capacity of the atmosphere to absorb CO2 is exceeded, it becomes a(n) ________ pollutant.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #8 Learning Objective: 02-04 Describe the different categories of pollution and contrast the degree of complexity in reducing emissions. |
| 9. | An accidental oil spill is an example of a(n) ________ emission while municipal treated waste is an example of a(n) ________ emission.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #9 Learning Objective: 02-04 Describe the different categories of pollution and contrast the degree of complexity in reducing emissions. |
| 10. | Continued extraction of a non-renewable resource can be sustainable over time if managed properly.
FALSE |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #10 Learning Objective: 02-02 Explain the intertemporal trade-offs with natural capital use. |
| 11. | A living resource can become non-renewable if the rate of harvest exceeds the growth rate of the resources stock.
TRUE |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #11 Learning Objective: 02-02 Explain the intertemporal trade-offs with natural capital use. |
| 12. | It is more difficult to develop and administer control policies for point source pollutants than it is for nonpoint source pollutants.
FALSE |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 02 #12 Learning Objective: 02-04 Describe the different categories of pollution and contrast the degree of complexity in reducing emissions. |
| 13. | Land is one of the three components that comprise natural capital. List the other two components discussed in the textbook and give one example of each.
The other two components of natural capital are natural resource capital and environmental capital (or ecosystems). An example of natural resource capital is water (other possible answers could include minerals and energy stocks, forests or fisheries). An example of environmental capital is the earths atmosphere (other possible answers could include forests, grasslands, wetlands or some other specific ecosystem). |
| Difficulty: Easy Field Chapter 02 #13 Learning Objective: 02-01 Describe the three components of natural capital and give specific examples of each type. |
| 14. | Define the terms renewable resource and non-renewable resource and give one example of each type.
A renewable resource grows over time through biological processes so that the harvest of this resource could be sustainable over time. An example of a renewable resource is a fishery (other possible answers could include lumber, solar energy, wind power or hydroelectric power). A non-renewable resource has a fixed stock which has no processes of replenishment so that extraction of this resource is not sustainable over time. An example of a non-renewable resource is coal (other possible answers could include oil, natural gas or mineral stocks such as copper). |
| Difficulty: Moderate Field Chapter 02 #14 Learning Objective: 02-02 Explain the intertemporal trade-offs with natural capital use. |
| 15. | Discuss why using a Zero Population Growth (ZPG) strategy to reduce output and/or to halt the rate of growth of output does not guarantee that the environmental impacts of production will be controlled.
There are two reasons why ZPG might not control the environmental impacts of production. First, even with no growth in the population, the economy could still grow resulting in increased demand for inputs from nature. Second, environmental impacts can be long run and cumulative so that even a stationary population can degrade the environment over time. |
| Difficulty: Moderate Field Chapter 02 #15 Learning Objective: 02-03 Describe ways to reduce residuals from the economy. |
| 16. | List one example each of a local, regional and global pollutant.
An example of a local pollutant would be noise pollution (other possible answers could include litter or cigarette smoke from a neighbour). An example of a regional pollutant is acid rain which occurs in parts of Canada and the US mainly as a result of emissions from the US (other possible answers could include smog or ground level ozone). An example of a global pollutant is CO2 which is a greenhouse gas that contributes to the problem of global warming (other possible answers could include other greenhouse gases or CFCs). |
| Difficulty: Easy Field Chapter 02 #16 Learning Objective: 02-04 Describe the different categories of pollution and contrast the degree of complexity in reducing emissions. |
c2 Summary
| Category | # of Questions |
| Accessibility: Keyboard Navigation | 12 |
| Difficulty: Easy | 13 |
| Difficulty: Moderate | 3 |
| Field Chapter 02 | 16 |
| Learning Objective: 02-01 Describe the three components of natural capital and give specific examples of each type. | 4 |
| Learning Objective: 02-02 Explain the intertemporal trade-offs with natural capital use. | 4 |
| Learning Objective: 02-03 Describe ways to reduce residuals from the economy. | 4 |
| Learning Objective: 02-04 Describe the different categories of pollution and contrast the degree of complexity in reducing emissions. | 4 |
c10
Student: ___________________________________________________________________________
| 1. | 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 ________.
|
| 2. | ________ suggest(s) that in the presence of an externality bargaining can achieve the socially efficient equilibrium regardless of the initial allocation of property rights.
|
| 3. | 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.
|
| 4. | Which of the following is NOT a reason why private bargaining can fail to achieve the socially optimal level of emissions?
|
| 5. | 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 ________.
|
| 6. | If the MAC and MD curves do not change based on who has the property rights, the same socially efficient equilibrium will be reached independent of who holds the rights to pollute.
True False |
| 7. | Net social gains are independent of who has the property rights to environmental resources.
True False |
| 8. | The Coase theorem states that social efficiency can be obtained through bargaining and that the gains to each party involved will be identical regardless of who has the rights.
True False |
| 9. | Coase proposed that in the case of an externality if transactions costs are low, bargaining can achieve the socially efficient outcome regardless of the initial allocation of property rights.
True False |
| 10. | The more public an environmental good is, the more likely private property rights can be used to achieve the socially optimal level of emissions.
True False |
| 11. | When a good is an open-access resource, the free-rider problem effectively defeats the chances that a socially efficient equilibrium can be achieved through property rights assignments and bargaining.
True False |
| 12. | Production and consumption of green goods shifts the marginal abatement cost curve downward.
True False |
| Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of the value of lost fish stocks) is represented by the equation: MDC = 10E The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation: MAC = 1,200 5E. |
| 13. | What level of emissions will occur if the chemical factory is not regulated? What would the total abatement costs for the chemical factory be if emissions are controlled and reduced to zero?
|
| 14. | If no liability laws are in place, what damages will the chemical factory inflict on the fishery?
|
| 15. | If the government puts in place a liability law that requires the chemical factory to compensate the fishery for the damages it causes, what level of emissions will take place and what are the total costs of compliance for the chemical company?
|
| 16. | If the chemical factory has the property right to use the river what bargaining will result in the socially efficient equilibrium? What are the net gains experienced by each party?
|
| 17. | If the fishery has the property right to use the river what bargaining will result in the socially efficient equilibrium? What are the net gains experienced by each party?
|
| 18. | List and very briefly explain the three problems encountered with the use of property rights as a technique to internalize externalities.
|
| 19. | Define green goods and give two examples of green goods.
|
| 20. | Illustrate graphically and very briefly explain how the production and consumption of green goods results in lower emissions.
|
c10 Key
| 1. | 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 ________.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #1 Learning Objective: 10-01 Explain how liability laws can reduce pollution and lead to a socially efficient equilibrium. |
| 2. | ________ suggest(s) that in the presence of an externality bargaining can achieve the socially efficient equilibrium regardless of the initial allocation of property rights.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #2 Learning Objective: 10-03 Describe the Coase theorem and why it is important for environmental policy. |
| 3. | 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.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #3 Learning Objective: 10-03 Describe the Coase theorem and why it is important for environmental policy. |
| 4. | Which of the following is NOT a reason why private bargaining can fail to achieve the socially optimal level of emissions?
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #4 Learning Objective: 10-04 Describe the factors that inhibit private bargaining from reaching a socially efficient equilibrium. |
| 5. | 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 ________.
|
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #5 Learning Objective: 10-05 Explain how recycling and green goods can reduce pollution and illustrate grapically the potential impacts. |
| 6. | If the MAC and MD curves do not change based on who has the property rights, the same socially efficient equilibrium will be reached independent of who holds the rights to pollute.
TRUE |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #6 Learning Objective: 10-02 Explain and show graphically how private property rights and bargaining between parties can lead to a socially efficient equilibrium and how the gains to each party differ depending on the starting point and who has the property rights. |
| 7. | Net social gains are independent of who has the property rights to environmental resources.
FALSE The net gains to society differ depending upon who holds the property rights to pollute. |
| Accessibility: Keyboard Navigation Difficulty: Moderate Field Chapter 10 #7 Learning Objective: 10-02 Explain and show graphically how private property rights and bargaining between parties can lead to a socially efficient equilibrium and how the gains to each party differ depending on the starting point and who has the property rights. |
| 8. | The Coase theorem states that social efficiency can be obtained through bargaining and that the gains to each party involved will be identical regardless of who has the rights.
FALSE The net gains to each party depend on the initial allocation of property rights. |
| Accessibility: Keyboard Navigation Difficulty: Moderate Field Chapter 10 #8 Learning Objective: 10-03 Describe the Coase theorem and why it is important for environmental policy. |
| 9. | Coase proposed that in the case of an externality if transactions costs are low, bargaining can achieve the socially efficient outcome regardless of the initial allocation of property rights.
TRUE |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #9 Learning Objective: 10-03 Describe the Coase theorem and why it is important for environmental policy. |
| 10. | The more public an environmental good is, the more likely private property rights can be used to achieve the socially optimal level of emissions.
FALSE Public goods tend to be non-exclusionary making it difficult to assign property rights. |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #10 Learning Objective: 10-04 Describe the factors that inhibit private bargaining from reaching a socially efficient equilibrium. |
| 11. | When a good is an open-access resource, the free-rider problem effectively defeats the chances that a socially efficient equilibrium can be achieved through property rights assignments and bargaining.
TRUE |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #11 Learning Objective: 10-04 Describe the factors that inhibit private bargaining from reaching a socially efficient equilibrium. |
| 12. | Production and consumption of green goods shifts the marginal abatement cost curve downward.
TRUE |
| Accessibility: Keyboard Navigation Difficulty: Easy Field Chapter 10 #12 Learning Objective: 10-05 Explain how recycling and green goods can reduce pollution and illustrate grapically the potential impacts. |
| Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of the value of lost fish stocks) is represented by the equation: MDC = 10E The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation: MAC = 1,200 5E. |
| Field Chapter 10 |
| 13. | What level of emissions will occur if the chemical factory is not regulated? What would the total abatement costs for the chemical factory be if emissions are controlled and reduced to zero?
In the absence of regulation, marginal abatement costs will equal zero: |
| Difficulty: Moderate Field Chapter 10 #13 Learning Objective: 10-01 Explain how liability laws can reduce pollution and lead to a socially efficient equilibrium. |
| 14. | If no liability laws are in place, what damages will the chemical factory inflict on the fishery?
With no liability laws, the chemical company will emit 240 units of emissions (level of emissions corresponding to MAC = 0). At this level of emissions, the total damage cost will be equal to the area under the MDC curve: |
| Difficulty: Moderate Field Chapter 10 #14 Learning Objective: 10-01 Explain how liability laws can reduce pollution and lead to a socially efficient equilibrium. |
| 15. | If the government puts in place a liability law that requires the chemical factory to compensate the fishery for the damages it causes, what level of emissions will take place and what are the total costs of compliance for the chemical company?
The chemical factory will minimize their total compliance cost which equals total damage compensation to be paid plus total abatement cost if they reduce emissions to the socially efficient level. This corresponds to the level of emissions that equates MAC and MDC: |
| Difficulty: Moderate Field Chapter 10 #15 Learning Objective: 10-01 Explain how liability laws can reduce pollution and lead to a socially efficient equilibrium. |
| 16. | If the chemical factory has the property right to use the river what bargaining will result in the socially efficient equilibrium? What are the net gains experienced by each party?
Since the chemical factory has the right to pollute, the fishery will need to pay the factory to get it to reduce its emissions. The socially efficient level of emissions is equal to 80 units of emissions. At this level of emissions, the MDC = MAC = $800. The fishery will need to pay the chemical factory $800 per unit of emissions it abates to get it to emit 80 tonnes. This bribe is equal to $128,000. The net gain to the fishery is equal to the reduction in total damage costs moving from unregulated emissions of 240 units to 80 units minus the bribe it pays to the chemical factory which equals $288,000 32,000 $128,000 = $128,000. The net gain to the chemical factory is equal to the bribe it receives from the fishery less its total abatement costs which equals 128,000 64,000 = $64,000. |
| Difficulty: Hard Field Chapter 10 #16 Learning Objective: 10-02 Explain and show graphically how private property rights and bargaining between parties can lead to a socially efficient equilibrium and how the gains to each party differ depending on the starting point and who has the property rights. |
| 17. | If the fishery has the property right to use the river what bargaining will result in the socially efficient equilibrium? What are the net gains experienced by each party?
Since the fishery has the right to clean water, the factory will need to pay the fishery to allow it to emit the socially efficient level of emissions which is equal to 80 units of emissions. At this level of emissions, the MDC = MAC = $800. The factory will need to pay the fishery $800 per unit of emissions it discharges into the river. This bribe is equal to $64,000. The net gain to the fishery is equal to the bribe it receives from the factory minus the damages resulting from 80 units of emissions which equals $64,000 32,000 = $32,000. The net gain to the chemical factory is equal to the reduction in total abatement cost it has to undertake from moving from zero emissions to the socially efficient level of emissions minus the bribe it pays to the fishery which equals 144,000 64,000 64,000 = $16,000. |
| Difficulty: Hard Field Chapter 10 #17 Learning Objective: 10-02 Explain and show graphically how private property rights and bargaining between parties can lead to a socially efficient equilibrium and how the gains to each party differ depending on the starting point and who has the property rights. |
| 18. | List and very briefly explain the three problems encountered with the use of property rights as a technique to internalize externalities.
Property rights fail to result in the socially efficient level of emissions when: 1) transactions costs are too high due to the presence of numerous parties to be involved in the negotiating process; 2) property rights cannot be assigned due to the good being a public good such as an open access fishery; and 3) some other laws prevent property owners from capturing the full social value of the resource in question. |
| Difficulty: Easy Field Chapter 10 #18 Learning Objective: 10-04 Describe the factors that inhibit private bargaining from reaching a socially efficient equilibrium. |
| 19. | Define green goods and give two examples of green goods.
Green goods are goods that give the same level of pleasure as ordinary goods but they involve less environmental damage in their production, use or disposal. Examples of green goods could include no-phosphate laundry detergent, mercury-free batteries, recycled paper products and energy-efficient appliances. |
| Difficulty: Easy Field Chapter 10 #19 Learning Objective: 10-05 Explain how recycling and green goods can reduce pollution and illustrate grapically the potential impacts. |
| 20. | Illustrate graphically and very briefly explain how the production and consumption of green goods results in lower emissions.
The following figure shows how production and consumption of green goods shifts the MAC curve from MAC1 to MAC2. Unregulated emissions fall from E1 to E2. Notice there is no impact on the MDC curve. |
| Difficulty: Easy Field Chapter 10 #20 Learning Objective: 10-05 Explain how recycling and green goods can reduce pollution and illustrate grapically the potential impacts. |
c10 Summary
| Category | # of Questions |
| Accessibility: Keyboard Navigation | 12 |
| Difficulty: Easy | 13 |
| Difficulty: Hard | 2 |
| Difficulty: Moderate | 5 |
| Field Chapter 10 | 21 |
| Learning Objective: 10-01 Explain how liability laws can reduce pollution and lead to a socially efficient equilibrium. | 4 |
| Learning Objective: 10-02 Explain and show graphically how private property rights and bargaining between parties can lead to a socially efficient equilibrium and how the gains to each party differ depending on the starting point and who has the property rights. | 4 |
| Learning Objective: 10-03 Describe the Coase theorem and why it is important for environmental policy. | 4 |
| Learning Objective: 10-04 Describe the factors that inhibit private bargaining from reaching a socially efficient equilibrium. | 4 |
| Learning Objective: 10-05 Explain how recycling and green goods can reduce pollution and illustrate grapically the potential impacts. | 4 |
c20
Student: ___________________________________________________________________________
| 1. | Employing a global CO2 price to contain mean projected warming to a specific target at least cost is an example of ________.
|
| 2. | When allowances are distributed to firms for free according to some allocation rule determined by the regulator this is known as ________.
|
| 3. | The Canadian province with the highest greenhouse gas emissions is ________.
|
| 4. | Environment Canadas quota system to phase out ozone depleting chemicals did not restrict the supply of specific CFCs or halons; rather it was set in term of ________ allowing for flexibility in meeting the target.
|
| 5. | ________ is a particular problem in ________ which contain a disproportionately large share of the worlds wild species, but which are also under great pressure to pursue modern economic development.
|
| 6. | A transferable emission permit scheme will always be superior to an emission tax when it comes to developing an economically efficient carbon pricing scheme.
True False |
| 7. | Developing a carbon pricing scheme with stable and predictable emission prices is an important design goal for policymakers to keep in mind.
True False |
| 8. | If permits are distributed through an auction, governments can recycle the revenue in the form of tax cuts to offset some losses experienced by firms.
True False |
| 9. | Carbon offsets result in either the same level of emission reduction at lower cost than in a system without them, or greater emissions reduction at the same cost because the offset works like a withdrawal of allowances from the market.
True False |
| 10. | The revenue from B.C.s carbon tax flows back to households and industry in the form of cuts to personal and corporate income tax rates, tax credits for low income and rural households, and some property tax relief for industry.
True False |
| 11. | Canadas implicit carbon tax rates that are below those of the United States but higher than those in Europe.
True False |
| 12. | Large multinational firms saw the potential for profits by developing substitutes for CFCs which helped with phasing out its use.
True False |
| 13. | International embarrassment is enough of a deterrent to prevent the development of a black market in CFCs.
True False |
| 14. | Biological diversity is a high priority for people who are struggling to get enough resources to achieve some degree of economic security.
True False |
| 15. | It is important to preserve biodiversity because genetic diversity from wild species can add value to agricultural breeding programs.
True False |
| 16. | Habitat maintenance is not essential for preserving biodiversity because breeding programs at zoos and agricultural research stations are adequate for this purpose.
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