Question 1

The concept of strict liability means that

Accepted Answer

The concept of strict liability means that polluters will be held responsible for damages regardless of the situation, without the need to prove fault or negligence. In other words, even if the polluter is not technically at fault, they will still be liable for any damages caused. This is often used in environmental law to hold companies accountable for pollution or other forms of environmental damage.

Question 2

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 ________.

Accepted Answer

A decentralized approach involves individual actors (such as businesses or individuals) negotiating with each other to solve environmental problems. This approach does not rely on government intervention, and instead allows for voluntary agreements and market-based solutions to emerge.

Question 3

Common law systems rely on court proceedings where claims and counter claims are adjudicated to determine damages and compensation.These proceedings can involve

Accepted Answer

Common law systems can involve court proceedings where private parties make claims of damages to their own private assets, claims of damages to public assets, or where public agencies claim damages to public assets. Therefore, all of the above options are possible in common law systems.

Question 4

The success of statutory laws relies on aligning the compensatory damages assigned to each polluter with

Accepted Answer

Compensatory damages should reflect the actual amount of damages caused by the polluter to ensure that they are held accountable for their actions and that the victims are adequately compensated.

Question 5

Nonjoint liability means

Accepted Answer

Nonjoint liability means that each party is separately responsible for their own portion of the damages, rather than all parties being collectively responsible. Therefore, only one party may be held responsible for the damages.

Question 6

Liability laws are one of the ways to ________ an externality.

Accepted Answer

Liability laws make individuals, companies or organizations responsible for the negative effects (externality) their actions have on others. This makes them internalize or take into account the costs of their actions, which can lead to more socially responsible decision-making.

Question 7

Which of the following is NOT a reason why private bargaining can fail to achieve the socially optimal level of emissions?

Accepted Answer

The answer of Which of the following is NOT a...

Question 8

The problem of misuse of many environmental assets is a result of

Accepted Answer

The problem of misuse of environmental assets is due to the absence or imperfection of clearly defined property rights. Without clear property rights, individuals may overuse or exploit environmental assets since they are not accountable for their actions. This is often observed in instances where resources are held in the public realm, such as forests or fisheries, where it becomes difficult to assign property rights to the various stakeholders involved.

Question 9

Refer to the figure above.If the damaging firm is emitting at the uncontrolled emissions level but is required to compensate damaged firms and individuals, the amount of that compensation would be

Accepted Answer

The compensation required would be equal to the total damages caused by the emissions, which is represented by the area (b+c+d) in the figure.

Question 10

In the U.S.courts, those seeking to be compensated for damages due to environmental pollution must

Accepted Answer

Those seeking compensation for damages due to environmental pollution must demonstrate that the emissions caused the damages and identify the source of the emissions. Additionally, there is typically a statute of limitations for filing such actions, which is usually 2-3 years. Therefore, all of the above choices are correct.

Question 11

________ suggest(s) that in the presence of an externality bargaining can achieve the socially efficient equilibrium regardless of the initial allocation of property rights.

Accepted Answer

The Coase theorem suggests that in the presence of an externality, bargaining between affected parties can result in the socially efficient outcome, regardless of how property rights are initially assigned. This means that parties will negotiate until the external cost or benefit is internalized, without the need for intervention by the government or legal system.

Question 12

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.

Accepted Answer

The Coase theorem states that as long as property rights are clearly defined and transaction costs are low, the efficient outcome can be reached through negotiation and bargaining. In this case, either the chemical company or the fishery could have the right to use the river, but the important thing is that the property rights are clearly defined. If one of the parties has the right to use the river, that party may have less incentive to negotiate than the other, which could lead to an inefficient outcome. However, if the property rights are defined in a way that allows both parties to negotiate, the socially efficient level of emissions can be reached through bargaining regardless of who has the initial right to use the river. Therefore, the best answer is C.

Question 13

When a resource has no owner

Accepted Answer

When a resource has no owner, it often leads to a lack of accountability and responsibility, resulting in little incentive for individuals to maintain or protect the resource, leading to its potential degradation.

Question 14

Regardless of who has the property rights to environmental resources

Accepted Answer

Net gains to society differ depending upon who holds the property rights to pollute because the allocation of resources will be different depending on who has the right to pollute. If the polluter has the right to pollute, then they will produce more pollution than if they did not have the right to pollute. This is because they do not have to bear the costs of the pollution, so they will not take into account the negative externalities that their pollution creates. On the other hand, if the victim of the pollution has the right to pollute, then they will produce less pollution than if they did not have the right to pollute. This is because they will have to bear the costs of the pollution, so they will take into account the negative externalities that their pollution creates.

Question 15

Refer to the figure above.If the damaging firm is emitting at the uncontrolled emissions level but is required to compensate damaged firms and individuals, the damaging firm has an incentive to

Accepted Answer

The damaging firm will reduce emissions to the level where marginal damages equal marginal abatement costs, as this minimizes the total cost of abatement and compensation.

Question 16

If the MAC and MD curves do not change based on who has the property rights,

Accepted Answer

The MAC and MD curves represent the social costs and benefits of pollution, so they will not change based on who holds the property rights. This means that the socially efficient equilibrium will be the same regardless of who holds the rights to pollute. Therefore, the answer is D.

Question 17

The Coase theorem states that social efficiency can be obtained through bargaining and

Accepted Answer

The Coase theorem suggests that as long as property rights are well-defined and transaction costs are low, parties can negotiate to reach a socially efficient outcome. However, the distribution of net gains depends on the initial allocation of property rights.

Question 18

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 ________.

Accepted Answer

Green goods are products designed to have a reduced impact on the environment throughout their lifecycle, including production, use, and disposal.

Question 19

Negligence is a form of common law that

Accepted Answer

Negligence refers to a failure to take reasonable care to prevent harm to someone or something. In the context of environmental law, polluters are held responsible for damages caused by their actions or omissions. Negligence law holds polluters responsible only if they have not taken reasonable steps to avoid or mitigate the damages. Therefore, option B is the correct choice.

Question 20

Liability laws are an effective way to incentivize efficient pollution solutions when

Accepted Answer

Liability laws are most effective when all of the above conditions are met. If relatively few parties are involved, it is easier to assign responsibility and determine liability. If causal linkages are clear, it is easier to determine who caused the pollution and who is responsible for cleaning it up. If damages are easy to measure, it is easier to determine the extent of the harm caused and to assess the appropriate level of compensation or remediation. When all of these conditions are present, liability laws can provide a powerful financial incentive for polluters to adopt more efficient and sustainable pollution solutions.

Quiz 10: Decentralized Policies: Liability Laws, Property Rights, and Voluntary Action