Deck 23: Ecological Economics

Question 1

An object's external costs are the

A) price the consumer pays for a product less sales tax.
B) price the consumer pays plus sales tax.
C) costs borne by groups or individuals other than those using the product.
D) actual costs incurred in producing a product.

Answer 1

costs borne by groups or individuals other than those using the product.

Question 2

_______ is a nonrenewable resource.

A) Scientific technology
B) Hydroelectric power
C) Coal
D) Biomass
E) Solar energy

Answer 2

Coal

Question 3

The updated model of the limits to growth suggests that changed public policies actually could produce a sustainable future.

Answer 3

True

Question 4

The economic theory that was originally focused on how the interests and values of individuals relate to larger societal goals is the ______ economic theory.

A) Political
B) Neoclassical
C) Classical
D) Social
E) Ecological

Question 5

Which of the following is considered human capital?

A) Timber
B) Solar energy
C) Technology such as hydroelectric power
D) Buildings in a community
E) Knowledge of history

Question 6

Ecology and economy are both derived from the Greek word "Oikos" meaning

A) The study of something
B) How things work
C) Relationships
D) Environment
E) Household

Question 7

Externalized costs include social costs as well as environmental costs.

Question 8

Natural capital is that which is created by

A) Industrial processes
B) Human labor
C) Natural Earth processes
D) Animal labor
E) All of these are ways natural capital is created

Question 9

Using natural resources so as to be sustainable indefinitely requires

A) harvesting natural products at rates not faster than the materials can be naturally replaced.
B) recycling household waste
C) only using manufactured materials instead of natural resources.

Question 10

Goals for an efficient economy from an ecological perspective include all of the following except

A) maximizing growth.
B) measuring progress by the percent of industries releasing no nasty pollutants.
C) measuring productivity by the number of people meaningfully employed.
D) valuing biological and cultural diversity.

Question 11

In general as supply increases so too does demand.

Question 12

One criticism of cost/benefit analysis is the subjectivity in deciding who should judge the value of a project's costs and benefits.

Question 13

Which of the following is considered social capital?

A) Community organization
B) Human experiences within a community
C) Technology such as a water treatment plant in a community
D) Buildings in a community
E) Knowledge of a community's history

Question 14

Neoclassical economics views

A) natural resources as the indispensable factor determining economic success.
B) constant economic growth as necessary and desirable.
C) a steady-state as the ultimate economic goal.
D) the relationship between supply and demand as having minor importance.

Question 15

Resources that are obtainable from Earth but are present in fixed amounts are called

A) proven reserves.
B) renewable resources.
C) non-renewable resources.
D) intangible resources.

Question 16

Renewable resources are those that

A) Will not be exhausted
B) Will always renew themselves unless we destroy them
C) Can be renewed through intensive investments of capital and labor
D) Are intangible and renewable
E) Are intangible and nonrenewable

Question 17

An example of an intangible resource is

A) beauty.
B) iron.
C) sunlight.
D) a biogeochemical cycle.

Question 18

An example of an intangible resource is

A) Solar energy
B) Satisfaction
C) Human labor
D) Capital
E) Extinct species

Question 19

It is thought by many economists that market forces will be less effective at minimizing pollution than rigid rules and regulations.

Question 20

Renewable resources are those that can be continuously replenished.

Question 21

In a frontier economy, there is usually a relative abundance of __________ because of the inefficiency ______________.

A) Social resources; of transportation
B) Labor; and lack of experience of workers
C) Capital (money); of the market economy at this first stage
D) Technology; of the processes to research and develop new technology
E) Natural resources; of the procedures for gaining access to resources

Question 22

On the classical supply-demand graph, ________ is highest when prices are low.

A) Demand
B) Supply
C) Market equilibrium
D) Cost
E) Quantity

Question 23

The price of natural gas doubles. What would happen to the quantity of the natural gas in a market system?

A) The quantity decreases because it is too expensive to produce.
B) The quantity increases because it is worthwhile to drill into lower quality fields.
C) The quantity increases because new natural gas is being created.
D) The quantity decreases because it is too expensive and people do not buy it.
E) The quantity stays the same because the price of a resource does not change the availability of that resource.

Question 24

"The Tragedy of the Commons" is based on the view that

A) Communal systems can be sustained and promoted.
B) Community members will attempt, without success, to sustain a resource for future generations.
C) Only privatization or strict laws can overcome people's selfish and greedy nature.
D) Individuals will try to maximize gain for the group at a loss for the individual.
E) Open access systems can be sustained and promoted.

Question 25

In economic terms, "demand" is how much of something

A) People want
B) People need
C) People will buy at current prices
D) Is available on the market
E) People will buy regardless of price

Question 26

A(n) ________ relationship exists between supply and demand. Therefore, when supply is high, demand is _____.

A) Correlational; high
B) Inverse; high
C) Inverse; low
D) Correlational; low
E) Strong; high

Question 27

Which author criticized the idea of commonly held resources in "The Tragedy of the Commons"?

A) Garret Hardin
B) Paul Ehrlich
C) Karl Marx
D) Gifford Pinchot
E) Thomas Malthus

Question 28

When a factory pollutes a river, the costs and losses that affect people downstream would be called ______ costs.

A) Indirect
B) External
C) Incidental
D) Internal
E) Social

Question 29

Which of the following is an example of a communal property system?

A) Cattle grazing on common woodlands and pastures in colonial New England
B) Maine lobster fishing
C) Privatization of Native American reservations in the United States
D) Offshore fisheries in many parts of the world
E) None of these are examples of a communal property system

Question 30

Ecological economics is different from the other economic theories because it recognizes the

A) Scarcity of natural capital
B) Recycling of ecological processes and the scarcity of manufactured capital
C) Abundance of natural capital
D) Fragility of the human economy and the power of ecological systems
E) Human economy as one part of a dynamic world system

Question 31

Which of the following is an example of an open access system?

A) Cattle grazing on common woodlands and pastures in colonial New England.
B) Maine lobster fisheries.
C) Nearshore fisheries in many parts of the world.
D) Native American management of wild rice beds and hunting grounds.
E) None of these are examples of an open access system.

Question 32

Political economy theory incorporates ______ while neoclassical economic theory incorporates _________.

A) The issues of social structures and value systems; objectivity and scientific analysis
B) Objectivity and scientific analysis; the issues of social structures and value systems
C) The value of social systems; the value of natural resources
D) Birth and death rates; natural resources and social structures
E) Objectivity and scientific analysis; supply and demand

Question 33

On the supply-demand graph, market equilibrium is marked

A) A
B) B
C) C
D) D
E) E

Question 34

In economic terms, "supply" is how much of something

A) People want
B) People need
C) People will buy at current prices
D) Is available on the market
E) People will buy regardless of price

Question 35

Which of the following is NOT true with respect to natural resource economics?

A) Natural resource economics views ecological processes as factors outside the economic system.
B) The principles of thermodynamics and coevolution are incorporated into natural resource economics.
C) Natural resources are seen as abundant in natural resource economics.
D) Neoclassical economic theory is similar to natural resource economics.
E) Natural resource economics assigns a monetary value to some natural resources.

Question 36

A steady-state economy would be marked by _____ resource consumption, _____ volume, and _____ output.

A) High; low; low
B) High; high; high-quality
C) Low; high; high-quality
D) Low; low; high-quality
E) Low; low; low-quality

Question 37

Price inelasticity is when _________ while price elasticity is when __________.

A) Prices cannot be negotiated; consumers can negotiate a price
B) Consumers can negotiate a price; prices cannot be negotiated
C) The supply/demand curve is followed; consumers buy a product regardless of cost
D) Consumers buy a product regardless of cost; the supply/demand curve is followed
E) Prices change frequently; prices are relatively stable

Question 38

The management of a wild area by a group of indigenous people, such as the management of wild rice beds, is an example of

A) Tragedy of the commons
B) A communal open access system
C) The "free-rider" system
D) A communal resource management system
E) Privatization

Question 39

Using the supply-demand graph, what happens as the price of goods or services increases?

A) The quantity of the goods or services decreases
B) The quantity of the goods or services increases
C) Demand increases and supply falls
D) Demand falls and supply increases
E) Market equilibrium is finally reached and the demand increases

Question 40

When we purchase a product, the price we pay directly reflects the _____ cost of producing it. If the manufacture of the product degrades the quality of air or water, then the costs of this pollution are termed _____ costs.

A) Incidental; external
B) Incidental; indirect
C) Indirect; incidental
D) External; internal
E) Internal; external

Question 41

Things like open space or clean air can be considered a resource because they are

A) Valued by people
B) Essential for efficient production
C) Exhaustible
D) Expensive
E) Hard to find

Question 42

Businesses are now willing to become "green" because

A) It improves their public image
B) It immediately saves them money
C) Doing so is expensive but makes good advertising
D) Doing so improves their image and saves money in the end
E) They need to obey laws and comply with government regulations

Question 43

Which of the following indicators is incorrectly matched with the factors it takes into account?

A) Gross National Product goods and services purchased
B) Genuine Progress Indicator the value of unpaid labor and natural resource depletion
C) Human Development Index life expectancy and educational attainment
D) Gross Domestic Product economic activities within a nation's borders
E) Gender Development Index gender and natural resource depletion

Question 44

In response to criticisms of Limits to Growth, a computer model was published in Beyond the Limits that

A) Predicted growth in both population and resources in the next century
B) Predicted an increase in resources in the next century
C) Includes technological progress and pollution abatement
D) Includes a lower rate of world population growth
E) Predicted a decrease in both population and resources in the next century

Question 45

The use of Gross National Product as an indicator of economic well-being

A) Is criticized as an inaccurate measure of the quality of life
B) Reflects social welfare
C) Predicts ecological bankruptcy through recognition of decreased natural capital
D) Takes into account life expectancy
E) Does not take into account economic activity overseas

Question 46

Most job layoffs occur as a result of

A) Seasonal work
B) Material shortages
C) Contract cancellation
D) Bankruptcy
E) Import competition

Question 47

Which of the following is not a major criticism of the type of analysis in the scenario?

A) People are willing to answer questions about how much they would spend to save the Amazon rainforest.
B) The quantification process compares the value of the lives of indigenous people's lives with the lives of people in the city who would be receiving the electricity.
C) The focus of this type of analysis would be mainly on the hydroelectric project rather than alternatives.
D) Monetary values are placed on intangible things like the river running freely.
E) These are all criticisms of this type of analysis.

Question 48

Many businesses are exploring and adopting the "design for the environment." Which of the following is not associated with this approach?

A) Improving public relations about the business's environmental policies
B) The products of a process are resources for other processes
C) Work within the limits of the current incoming amounts of solar energy
D) Including an emphasis on the maintenance of cultural and biological diversity
E) All of these are associated with adopting the "design for the environment."

Question 49

The analysis

A) Includes many subjective judgments
B) Is strictly an objective economic activity
C) Is straightforward because the factors are easily quantified
D) Is an excellent process to use when dealing with uncertainties like the effects on indigenous people
E) Ensures fairness to all people who are involved in the projects

Question 50

In 1997, ecological economists put a price on the goods and services provided by natural systems. This estimated annual value ranged from

A) $16-54 trillion
B) $16-54 billion
C) $16-54 million
D) $16-54 thousand
E) $1600-$5400

Question 51

The graph shows how __________ when economies develop.

A) Quantity increases as prices rise
B) Prices fall as quantities increase
C) Prices and quantities fall simultaneously
D) Quantities and prices increase simultaneously
E) Quantities and prices naturally change through time

Question 52

What is the name of the process the lending institution is going through in this scenario?

A) Long-term analysis
B) Supply-demand analysis
C) Tangible-intangible cost analysis
D) Benefit-need ratio analysis
E) Cost-benefit analysis

Question 53

An example of a market-based incentive for environmental protection would be

A) Rigid laws outlawing pollution production
B) Fees placed on certain types or volumes of a pollutant
C) Fees charged to inventors of new control technologies
D) Setting prices for pollution according to consumer demand
E) All of these are examples of market-based incentives for environmental protection

Question 54

The computer models published in the 1972 Limits to Growth predicted _____ in the next century.

A) Population stability
B) Population and resource crashes
C) Growth in both population and resources
D) An immediate decrease in pollution levels
E) An increase in industrial output

Question 55

Which of the following is not an effective response to resource scarcity?

A) Substituting different materials for scarce ones
B) Increasing efficiency
C) Diverting capital (money) to conventional industries
D) Increasing trade with other regions
E) Recycling

Question 56

In Limits to Growth, the Club of Rome predicted that

A) Steady-state economic systems were not viable
B) Sustained economic growth of most countries was likely for the near future
C) Predicting the future was impossible
D) Technology would help mitigate the effects of increased populations
E) Economic collapse is likely if we do not reduce population growth

Question 57

The price/quantity intersection marked "a" in the graph represents a(an) ________ economy.

A) Developing
B) Modern
C) Elastic
D) Frontier
E) Developed

Question 58

The function of the World Bank is to administer

A) Small local development grants
B) Small international grants
C) Savings for major global corporations
D) Small local aid
E) Major international development aid

Question 59

Which of the following would not be counted as part of the Gross National Product?

A) A new car purchase by a corporation
B) Installation of cable television by a company
C) Home health care by a family member
D) Government purchases
E) Dental services for an individual

Question 60

Environmental protection has been proven to __________ the number of available jobs because __________.

A) Decrease; it limits the use of nonrenewable resources (as in the case of the logging industry)
B) Increase; labor is usually substituted for natural resources (as in the case of recycling)
C) Stabilize; the use of nonrenewable resources is stabilized, and jobs are scarce anyway
D) Decrease; it negatively affects economic growth
E) Stabilize; it limits the use of nonrenewable resources (as in the case of the logging industry)

Question 61

The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) agreements are primarily negotiated among the largest industrial nations. This tends to keep less-developed countries in the role of resource supplier to more developed countries.

Question 62

Draw a classic supply/demand curve. Label the x axis, y axis, and market equilibrium.

Question 63

Pollution charges and emissions trading are examples of market-based mechanisms for environmental protection.

Question 64

Contrast the views and philosophies of the economist who believes that substitutes can be found for resources with the ecologist who warns of limits to the amount of resources available.

Question 65

The Grameen Bank is a microlender whose business loans assist mainly low-status women.

Question 66

In response to criticisms of World Bank policies, the U.S. Congress now insists that all loans for international development be allocated to large projects rather than small ones.

Question 67

What you choose to buy as a consumer does not really influence businesses to produce eco-friendly goods and services.