Questions:
Qujestion 1
1.If the production of a good generates an external benefit to the producer and producer does not factor these costs into his decision making, then _____. the market will overproduce the good
the market will under produce the good
the market will be efficient
the good will be sold at a price lower than it needs to be
Question 2
In a case where there are two polluters, with Polluter 1 having a higher cost of pollution abatement than Polluter 2, the cost-effective allocation of abatement resources will be achieved when _____.
each polluter abates to the point where its MAC = MT (marginal tax)
Polluter 1, the higher cost abater, abates more pollution and pays a higher tax
Polluter 2, the lower cost abater, abates less pollution and pays higher tax
Polluter 1, the higher cost abater, abates less pollution and pays a lower tax
Question 3
Economic costs are made up of _______.
accounting costs
explicit costs
implicit costs
both explicit and implicit costs
Question 4
The survey approach to cost estimation _____.
relies on estimated abatement expenditures obtained directly from polluting sources
is based on the least-cost available technology needed to achieve a given level of abatement
is an estimation method that can be used to measure implicit costs
is used to estimate dollar values based on available abatement technology
Question 5
A decrease in discount rate will ______.
leave net present value of future benefits unchanged
increase the net present value of future benefits
decrease the net present value of future benefits
None of the above
Question 6
The present value of net benefits (PVNB) is _____.
the difference between PVB and PVC
used to determine the feasibility of a policy option if its magnitude exceeds unity
the ratio of the PVB to PVC
marginal benefits minus marginal costs of a project
Question 7
Which of the following is a criteria pollutant?
Carbon dioxide
Nitrogen oxide
Tropospheric ozone
None of the above
Question 8
Which of the following is a category of pollutant in water?
Toxic pollutant
Conventional pollutant
Nonconventional pollutant
All of the above
Question 9
What law governs the U.S. policy on hazardous and solid waste today?
Solid Waste Disposal Act (SWDA)
Resource Recovery Act
Hazardous and Solid Waste Amendments
Superfund
Question 10
Which of the following is an example of a sustainable approach initiative?
Extended Product Responsibility (EPR)
Design for the Environment (DfE)
Green chemistry
All of the above
Question 11
EPA stands for _____.
Environmentalists Protection Agenda
Environmental Protection Agency
Economists Protection Agency
Executive Protection Agency
Question 12
Air pollution from exhaust of automobiles and water pollution from manufacturing plants are examples of _____.
external diseconomies
negative externalities
internal distortion
social distortion
1.Environmental eonomics is unique from standard economic analysis in that risks and benefits may be very difficult to assess, there may be incremental benefits, unknown linkages, and sometimes devastating unforeseen consequences. Given this uncertainty, suppose that you are part of a research team evaluating a proposal to clean up a hazardous waste site. How would you assess the benefits? What would be the primary variables of interest, the data requirements, and potential pitfalls? (Points : 40)
Question 2 Restoring wetlands today may convey benefits 50 years from today estimated at $50,000 (fishing, oyster cultivation, habitat preservation).
i) Calculate the present value of this project using a social discount rate of 3% and assuming that inflation is 2% (thus a nominal social discount rate of 5%).
ii) Next, calculate the present value using the same inflation rate but a social discount rate of 1%. Show your calculations in a table.
If the cost of preserving the wetlands is $10,000 in the present, would the project be feasible? Use the present value of net benefits to support your decisions and explain how this differs from the benefit-cost ratio.
Discuss the importance of choosing the social discount rate and how society may be inappropriately evaluating the benefits of environmental projects.
Question 3
Briefly summarize economist Paul Portney's critique of the Clean Air Act Amendment, referencing allocative efficiency and marginal analysis versus total cost-benefit analysis. Contrast this to the EPA analysis and critique these two assessments.
Question 4
In Southampton, Long Island, a rural resort town, the townies generally transport their own wastes to the town landfill where they pay as you throw, but the wealthy estates generally pay a flat fee for waste disposal. Explain this dichotomy in terms of incentives to recycle, efficiency of trash reduction, and discuss the pros and cons of flat-fee pricing, waste-end charges, retail-disposal charges, and deposit-refund charges.
Question 5
The World Trade Organization and its predecessor GATT are frequently criticized for their decisions regarding the environment. Briefly discuss the relationship between economic growth and environmental degradation, and then discuss the relationship between economic growth and international trade. Use this as a background to discuss the Uruguay Round decision that a nation cannot restrict imports from countries whose environmental standards are lower and therefore, less costly for their producers.