Deck 4: Growth and the Environment in Latin America

Question 1

A negative externality is an example of:

A) Market based initiatives
B) Foreign direct investment
C) Autarky
D) A market failure
E) Portfolio capital

Answer 1

D

Question 2

To solve for a negative externality in a market, conceptually, one would need to:

A) shift the supply curve sufficiently to the left
B) shift the demand curve sufficiently to the left
C) shift the supply curve sufficiently to the right
D) shift the demand curve sufficiently to the right
E) do nothing

Answer 2

A

Question 3

If pollution is too high in Mexico City, then the _____ of pollution is greater than the _____.

A) MC; MB
B) MB; MC
C) ISI; MC
D) MNC; MC
E) none of the above

Answer 3

A

Question 4

The socially optimal level of pollution occurs where:

A) MC is twice as big as MB
B) MC is half as big as MB
C) MC is equal to MB
D) MC/MB = 4
E) MB/MC = 4

Question 5

Latin America has suffered roughly how many natural disasters between 1974 and 2003?

A) 500
B) 100
C) 300
D) 900
E) 1200

Question 6

The most common form of pollution control in Latin America is:

A) command and control.
B) market based initiatives.
C) tradable permits.
D) pollution taxes.
E) none of the above

Question 7

Which form of pollution control is most common in Latin America?

A) MBI
B) CAC
C) Cap and trade
D) ISI
E) MTN

Question 8

Which of the following would be most closely associated with current pollution control policy in Latin America?

A) MC/MB
B) CAC
C) MBI
D) pollution taxes
E) tradeable permits

Question 9

What is the major drawback of command and control as a means of pollution control policy?

A) Producers have no incentive to reduce pollution past the set standard.
B) CAC is very expensive to implement
C) Most producers refuse to implement CAC
D) Latin American governments do not have the authority to enforce CAC
E) CAC does not lead to the socially optimal level of output for pollution intensive goods

Question 10

The use of market signals to influence producer behavior with regard to pollution is known as:

A) negative externality
B) command and control
C) market failure
D) market based initiatives
E) positive externality

Question 11

An example of MBI is:

A) CAC.
B) industrial water pollution.
C) pollution taxes.
D) MC/MB
E) none of the above

Question 12

Which issue of pollution control do tradable pollution permits not address?

A) Providing incentives for firms to produce output in a less pollution intensive manner
B) Generating revenue for the government
C) Allowing the government to set the overall pollution level
D) Reduce pollution taking place in the informal sector of the economy
E) Force firms to reveal what the right to pollute is worth

Question 13

Which of the following is the most serious pollution problem in Latin America with regards to short-run public health?

A) water pollution
B) industrial waste
C) air pollution
D) biodiversity
E) none of the above

Question 14

Which of the following is the easiest environmental problem to deal with as the sources are easy to locate?

A) air pollution
B) industrial water pollution
C) deforestation
D) acid rain
E) none of the above

Question 15

Which of the following forms of pollution is easiest to deal with?

A) air pollution
B) clean drinking water
C) deforestation
D) industrial water pollution
E) none of the above

Question 16

Which of these is not a common environmental issue in Latin America?

A) Air pollution
B) Deforestation
C) Water pollution
D) Chronic flooding
E) Biodiversity

Question 17

Which country leads Latin America in CO2 emissions per capita?

A) Paraguay
B) Venezuela
C) Columbia
D) Chile
E) Bolivia

Question 18

The urbanization percentage in Latin America in 2017 was approximately:

A) 30%
B) 50%
C) 100%
D) 20%
E) 80%

Question 19

_____ percent of the population of Latin America lives in urban areas.

A) 42
B) 51
C) 55
D) 61
E) 80

Question 20

Urbanization tends to be lowest in countries with:

A) highest GDP per capita
B) highest levels of pollution
C) lowest GDP per capita
D) average GDP per capita
E) lowest rate of natural disasters

Question 21

Latin America contains approximately _____ percent of the world's forests.

A) 10
B) 17
C) 24
D) 32
E) 41

Question 22

The forests of Latin America provide a _____ for the world.

A) negative externality
B) positive externality
C) tragedy of the commons
D) urbanization
E) none of the above

Question 23

Which of these characteristics describe what is known as a tragedy of the commons?

A) No available resources, no clear property rights
B) Available resources, no clear property rights
C) No available resources, clear property rights
D) Available resources, clear property rights.
E) none of the above

Question 24

The lack of property rights that leads to the overuse of natural resources is known as:

A) biodiversity.
B) the tragedy of the commons.
C) sustainable development.
D) pollution havens.
E) none of the above

Question 25

Which of the following is associated with a lower rate of deforestation in Brazil?

A) a massive increase in the number of helicopters
B) an improvement in defining who owns property in the forest
C) more benevolent businesses operating in the forest
D) higher global commodity prices
E) all of the above

Question 26

Which of the following is related to deforestation?

A) positive externality
B) tragedy of the commons
C) plantation forestry
D) a and b
E) b and c

Question 27

Latin America contains _____ percent of the world's plants.

A) 11
B) 24
C) 37
D) 42
E) 45

Question 28

Latin America is in a situation where:

A) The rate of consumption of natural capital is larger than nature's ability to replenish it
B) The rate of consumption of natural capital roughly matches nature's ability to replenish it
C) The rate of consumption of natural capital is lower than nature's ability to replenish it.
D) Natural capital is now zero.
E) none of the above

Question 29

According to the environmental Kuznets curve, which type of country will have the highest pollution levels?

A) low income
B) middle income
C) high income
D) developed
E) authoritarian

Question 30

The relationship between GDP per capita and pollution is:

A) exporting environmentalism
B) the concept of a pollution haven.
C) sustainable development.
D) biodiversity
E) none of the above

Question 31

The environmental Kuznets curve:

A) doesn't exist for Latin America.
B) is heavily influenced by FDI.
C) has a positive slope for low and middle income countries.
D) has a negative slope for low-income countries.
E) none of the above

Question 32

The environmental Kuznets curve shows that:

A) as urbanization increases, pollution increases
B) as urbanization increases, pollution decreases
C) as GDP per capita increases, pollution increases, levels off, and then decreases
D) as GDP per capita increases, pollution decreases, levels off, and then increases
E) as GDP per capita increases, urbanization increases

Question 33

Explain why pollution is such a problem in Latin America in terms of MC/MB.

Question 34

Describe the environmental Kuznets curve. How does this apply to Latin America?

Question 35

Suppose that a representative government in Latin America does not allow market forces to set the price of gas and/or diesel and the price is kept artificially low. How would one relate this to air pollution problems in large cities in the country?

Question 36

Draw a graph and show why cheap gas and diesel is an environmental problem. How do you fix this?

Question 37

Briefly describe the three policies available to deal with pollution. Which one is most commonly used in Latin America and which one perhaps may be more appropriate given the current institutional environment in many countries of the region?

Question 38

List and briefly describe the 3 different solutions to the control of pollution. Which of the three is the most commonly used in Latin America? Why is this so?

Question 39

Compare and contrast the different methods of pollution control. What are the merits and flaws of each of these methods?

Question 40

Explain why institutions are so important in regulating environmental issues.

Question 41

Describe the problem of polluted water in Latin America.

Question 42

Describe the problem of air pollution in Latin America.

Question 43

What is the relationship between urbanization and pollution in Latin America?

Question 44

Explain why deforestation and reducing the biodiversity is such an important issue in Latin America. Be sure to explain the impact these have as a positive externality.

Question 45

As an economy develops, there are three effects occurring that can influence the overall level of pollution. Describe these effects.

Question 46

Explain why the environmental Kuznets curve applies to Latin America.

Question 47

Explain the notion behind pollution havens. Why did many people believe this would occur with the signing of NAFTA?