Question 1

Refer to Table 8.1. If the before/after principle were applied to estimate the change in cost due to a new environmental regulation, the added costs due to the new regulation would be ________.

Accepted Answer

The before/after principle compares the costs before and after the implementation of the new regulation. The added costs due to the new regulation would be the difference between the costs after and before the regulation, which is $90.

Question 2

Refer to the Figure above. Panel (b) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p₁ to p₂

Accepted Answer

The price per unit increase from p1 to p2 is equal to the cost per unit increase from c1 to c2, as the industry passes the entire cost increase onto consumers.

Question 3

Refer to Table 8.1. If the with/without principle were applied to estimate the change in cost due to a new environmental regulation, the added costs due to the new regulation would be ________.

Accepted Answer

B

Question 4

Refer to the Figure above. Panel (a) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p₁ to p₂

Accepted Answer

According to the graph, the cost per unit increases from c₁ to c₂_., and the price per unit increases from p₁ to p₂. The question asks for the relationship between these two increases, and as shown in the graph, they are equal. Therefore, the correct answer is A.

Question 5

Social costs are equal to

Accepted Answer

Social costs are the sum of private costs and external costs, which are the costs incurred by third parties as a result of economic activities. Therefore, the correct choice is D, as it includes both the private costs and external costs.

Question 6

An example of a cost to a private group that is not a cost from the standpoint of society is ___________.

Accepted Answer

A tax paid by a private group to the government is a transfer within society, not a cost to society as a whole. Taxes are a redistribution of resources within the economy, not a loss of resources.

Question 7

When providing costs associated with industry regulations that allow firms latitude in their response, the analysis must first begin with

Accepted Answer

In order to assess the costs associated with industry regulations that allow firms latitude in their response, it is necessary to first identify the alternatives that firms might pursue, such as investing in new technology, changing production methods or outsourcing. This will provide a more comprehensive understanding of the potential costs and benefits of the regulation on the industry, including impacts on production, employment, and product prices.

Question 8

Suppose a manufacturing firm that is about to be regulated faces the following actual and potential production costs: 1) $4,000 before regulation; 2) $4,550 in the future without the regulation; and 3) $5,200 in the future with the regulation. The true cost of the proposed regulation, invoking the with/without principle, is ________.

Accepted Answer

The with/without principle compares the cost of a particular decision or policy with and without the proposed change. In this case, the proposed change is regulation.

The actual cost of production before regulation was $4,000. If regulation were not imposed, the cost of production in the future would be $4,550. With regulation, the cost would be $5,200. Therefore, the cost of the proposed regulation is the difference between the cost with regulation ($5,200) and the cost without regulation ($4,550), which is $650. Thus, the true cost of the proposed regulation is $650.

Question 9

Cost data gathered to construct a representative firm

Accepted Answer

Cost data gathered to construct a representative firm is typically collected by surveying current firms in the industry. However, this data can be misrepresentative when the industry is comprised of heterogeneous firms. Additionally, this data is typically more accurate for historical costs than future costs under new regulations. Therefore, all of the options given are correct.

Question 10

Refer to the Figure above. Panel (a) and Panel (b) represent industries that have experienced cost increases due to environmental regulations. Assume that both price increases are equivalent. Which panel reflects less impact on the consumer and a large industry adjustment, in terms of less output?

Accepted Answer

Panel (b) reflects a smaller increase in quantity demanded in response to the same price increase, indicating that consumers are less sensitive to price changes in this industry. This means that the industry has a larger adjustment and can reduce output more without losing as many customers. Therefore, Panel (b) reflects less impact on the consumer and a larger industry adjustment.

Question 11

A region is considering two sites on which to locate a new wastewater treatment plant. Site A has been owned by the region for five years and the region initially paid $200,000 for the land. The current market value of Site A is $400,000. Site B is land the region would have to purchase for $300,000. What is the social opportunity cost of each site?

Accepted Answer

The social opportunity cost of using Site A is the current market value of $400,000, as this is the value that society forgoes if the site is used for the wastewater treatment plant instead of being sold or used for another purpose. For Site B, the social opportunity cost is the purchase price of $300,000, as this is the amount that would need to be spent to acquire the site for the project.

Question 12

Cost data surveys includes questions related to

Accepted Answer

Cost data surveys typically include questions related to various factors that influence costs, such as the number of employees, processes used, and costs of energy. Therefore, the best choice is D, which includes all of these options.

Question 13

Suppose a manufacturing firm that is about to be regulated faces the following actual and potential production costs: 1) $2,500 before regulation; 2) $2,925 in the future without the regulation; and 3) $3,240 in the future with the regulation. The before/after cost of the regulation is ________ and the with/without cost of the regulation is ________.

Accepted Answer

The before/after cost of the regulation is the difference between the cost before regulation and the cost with regulation, which is $3,240 - $2,500 = $740. The with/without cost of the regulation is the difference between the cost without regulation and the cost with regulation, which is $2,925 - $3,240 = -$315. Since the cost is negative, the firm would actually save money by implementing the regulation. Therefore, choice C is the best answer.

Question 14

When evaluating proposals for building a new municipal sewage treatment plant, a benefit-cost analysis

Accepted Answer

When evaluating proposals for building a new municipal sewage treatment plant, a benefit-cost analysis must include the value of the land even if it is donated. This is because the value of the land represents an opportunity cost for the municipality, meaning that the land could have been used for another purpose that generates benefits for the community. Therefore, it is important to include the value of the land in the analysis to make an accurate assessment of the costs and benefits associated with the project.

Question 15

When examining the costs associated with a local regulation, the affected local community believes the local social costs are high and

Accepted Answer

The local community perceives the local social costs as high, but the broader social opportunity costs are low, indicating that the regulation may not significantly impact the overall economy or opportunities outside the local context.

Question 16

Another term for pollution taxes is ___________. These are payments from one group, the polluters, to another group, the administering agency or beneficiary of the tax.

Accepted Answer

Transfer payments are payments made by one group to another without any goods or services being exchanged. Pollution taxes are a type of transfer payment, as polluters pay money to the administering agency or the beneficiaries of the tax without any direct exchange of goods or services. Opportunity costs are the value of the next best alternative foregone when making a decision, external costs are the costs incurred by third parties as a result of economic transactions, and enforcement costs are the costs associated with enforcing laws and regulations.

Question 17

A city is evaluating a proposal to build a recycling depot. If a generous citizen is willing to donate land for the project with a current market value of $800,000, the ________ of the land is ________.

Accepted Answer

The social opportunity cost is the value of the next best alternative foregone, which in this case is the opportunity cost of using the land for an alternative purpose, such as a park or a community center. Therefore, the social opportunity cost of the land is $800,000, which is the current market value of the land. The private cost to the city would be zero, since the land is being donated by a generous citizen.

Question 18

Illegal roadside dumping resulting from the introduction of waste disposal charges is one example of the ________ of an environmental policy.

Accepted Answer

Unintended consequences refer to the outcomes that were not predicted or anticipated by the implementers of a policy. In this case, the introduction of waste disposal charges aimed at reducing the amount of waste generated, but it resulted in illegal roadside dumping, which was an unintended consequence of the policy.

Question 19

Environmental protection and control programs can also have adverse environmental effects and additional costs. Some of these effects and costs include

Accepted Answer

All of the options listed can be adverse effects and costs of environmental protection and control programs. Media switching, which refers to a shift from one environmental problem to another as a result of policies and regulations, can lead to unintended consequences. Unforeseen impacts may arise as people and businesses adjust to new programs, such as unexpected increases in energy consumption due to the adoption of energy-efficient appliances. Mitigating programs, which are put in place to address additional environmental impacts resulting from the implementation of control programs, can add to the overall cost and complexity of environmental protection efforts.

Question 20

Cost of environmental quality programs can be estimated at a variety of different levels. Perhaps the most straightforward level would be

Accepted Answer

Costs of single facilities are the most straightforward level at which the cost of environmental quality programs can be estimated because they involve direct, tangible expenses associated with specific operations or projects, making them easier to calculate and attribute.

Quiz 8: Benefit-Cost Analysis: Costs

Refer to Table 8.1. If the before/after principle were applied to estimate the change in cost due to a new environmental regulation, the added costs due to the new regulation would be ________.

Refer to the Figure above. Panel (b) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p₁ to p₂

Refer to Table 8.1. If the with/without principle were applied to estimate the change in cost due to a new environmental regulation, the added costs due to the new regulation would be ________.

Refer to the Figure above. Panel (a) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p₁ to p₂

Social costs are equal to

An example of a cost to a private group that is not a cost from the standpoint of society is ___________.

When providing costs associated with industry regulations that allow firms latitude in their response, the analysis must first begin with

Cost data gathered to construct a representative firm

Refer to the Figure above. Panel (a) and Panel (b) represent industries that have experienced cost increases due to environmental regulations. Assume that both price increases are equivalent. Which panel reflects less impact on the consumer and a large industry adjustment, in terms of less output?

Cost data surveys includes questions related to

When evaluating proposals for building a new municipal sewage treatment plant, a benefit-cost analysis

When examining the costs associated with a local regulation, the affected local community believes the local social costs are high and

Another term for pollution taxes is ___________. These are payments from one group, the polluters, to another group, the administering agency or beneficiary of the tax.

A city is evaluating a proposal to build a recycling depot. If a generous citizen is willing to donate land for the project with a current market value of $800,000, the of the land is .

Illegal roadside dumping resulting from the introduction of waste disposal charges is one example of the ________ of an environmental policy.

Environmental protection and control programs can also have adverse environmental effects and additional costs. Some of these effects and costs include

Cost of environmental quality programs can be estimated at a variety of different levels. Perhaps the most straightforward level would be

Quiz 8: Benefit-Cost Analysis: Costs

Refer to Table 8.1. If the before/after principle were applied to estimate the change in cost due to a new environmental regulation, the added costs due to the new regulation would be ________.

Refer to the Figure above. Panel (b) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p1 to p2

Refer to Table 8.1. If the with/without principle were applied to estimate the change in cost due to a new environmental regulation, the added costs due to the new regulation would be ________.

Refer to the Figure above. Panel (a) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p1 to p2

Social costs are equal to

An example of a cost to a private group that is not a cost from the standpoint of society is ___________.

When providing costs associated with industry regulations that allow firms latitude in their response, the analysis must first begin with

Cost data gathered to construct a representative firm

Refer to the Figure above. Panel (a) and Panel (b) represent industries that have experienced cost increases due to environmental regulations. Assume that both price increases are equivalent. Which panel reflects less impact on the consumer and a large industry adjustment, in terms of less output?

Cost data surveys includes questions related to

When evaluating proposals for building a new municipal sewage treatment plant, a benefit-cost analysis

When examining the costs associated with a local regulation, the affected local community believes the local social costs are high and

Another term for pollution taxes is ___________. These are payments from one group, the polluters, to another group, the administering agency or beneficiary of the tax.

A city is evaluating a proposal to build a recycling depot. If a generous citizen is willing to donate land for the project with a current market value of $800,000, the ________ of the land is ________.

Illegal roadside dumping resulting from the introduction of waste disposal charges is one example of the ________ of an environmental policy.

Environmental protection and control programs can also have adverse environmental effects and additional costs. Some of these effects and costs include

Cost of environmental quality programs can be estimated at a variety of different levels. Perhaps the most straightforward level would be

Refer to the Figure above. Panel (b) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p₁ to p₂

Refer to the Figure above. Panel (a) represents an industry that has experienced cost increases due to environmental regulations. The price per unit increase that the industry experiences, from p₁ to p₂

A city is evaluating a proposal to build a recycling depot. If a generous citizen is willing to donate land for the project with a current market value of $800,000, the of the land is .