Question 1

Explain some important situations where direct controls have a clear advantage over taxes.

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Question 2

Explain why environmentally minded firms in a competitive industry will find it difficult to take environmental action.

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Question 3

Voluntarism often has proved to be weak and unreliable. Does it still have a place in controlling activities that damage the environment?

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Question 4

Why do most economists favor emissions taxes over direct controls as a pollution deterrent?

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Question 5

Describe how a pollution-control authority might use an emissions permits system to reduce pollution.

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Question 6

How does the price system cope with depletable resources?

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Question 7

Compare market price and quantity of steel to socially optimal price and quantity if steel producers ignore soot emitted from their smokestacks. Use a graph to assist your explanation

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Question 8

Explain what a "cap and trade" program is and how it works. Does the United States have a cap and trade program? If so, is it successful?

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Question 9

How do rising prices slow resource depletion?

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Question 10

If a firm that emits a form of pollution is also a monopolist, is the firm more likely to be allocatively efficient when compared to a nonmonopoly polluter? Explain.

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Question 11

What has happened to resource prices in the twentieth century and what do they reveal about resource scarcity?

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Question 12

Discuss the role of individuals and governments in committing environmental damage.

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Question 13

Why do polluting firms overproduce? Use a completely and correctly labeled graph to illustrate your answer.

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Question 14

Why is it misleading to argue that emissions permits are a "license to pollute"?

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Question 15

What are the advantages of a tax system for pollution control?

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Question 16

What are the implications of the law of conservation of matter and energy for recycling and waste disposal?

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Question 17

Will depletable resources such as oil, coal, and aluminum be exhausted if their prices are left to the market?

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Question 18

"One of the failings of a market system is the damage to the environment. Pollution would not exist with a centrally planned economy." Evaluate this statement.

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Question 19

Detrimental externalities like pollution are a shortcoming of the market mechanism. Do they occur in free market economies alone? Explain with examples.

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Question 20

Explain why environmental damage would be classified as an externality.

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Quiz 16: Externalities, Externaliteis, the Environment, and Natural Resources