Question 1

Government regulation is
A)subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies.
B)the only reliable way to improve environmental quality.
C)not subject to political concerns when it comes to environmental quality.
D)the most economically efficient way to reduce greenhouse gases.

Accepted Answer

Government regulation, just like in centrally planned economies, can suffer from the problem of lack of information and incentives for economic efficiency. This can result in regulatory actions that may be ineffective or overly burdensome without achieving the desired environmental outcomes. Therefore, option A is the most appropriate choice. The other options are too extreme and do not represent a nuanced understanding of the role of government regulation in addressing environmental issues.

Question 2

The burning of fossil fuels may cause global warming. Considering both the science and the reactions of crops, human health, and other factors across differing climates, economists generally agree that
A)to protect the interests of future generations, the buildup of carbon dioxide must soon be stopped.
B)any climate change, if it actually occurs, will be extremely costly.
C)there will be both costs and benefits if the climate warms.
D)all people will be worse off if the climate warms.

Accepted Answer

C

Question 3

It can be difficult to define and enforce property rights against damaging pollutants when
A)many polluters are harming one person.
B)many polluters harm the same large group of people with the same pollutant.
C)the harms are difficult to quantify.
D)All of the above are true.

Accepted Answer

All of the options listed make it difficult to define and enforce property rights against damaging pollutants. If many polluters are harming one person, it can be unclear who is responsible for the harm and how to quantify the damage. If many polluters harm the same large group of people with the same pollutant, it can be difficult to determine individual responsibility and how to assign damages. Additionally, if the harms are difficult to quantify, it may be challenging to determine the extent of the damage and how much compensation is necessary.

Question 4

Most scientists agree that
A)if global warming continues for another century, the sea levels will rise substantially, imposing costs much larger than the cost of preventing the warming.
B)the earth has warmed about one degree Fahrenheit in the past century.
C)global warming will substantially reduce future rates of economic growth and lead to sharp reductions in living standards.
D)regulations like those outlined in the Kyoto Protocol will substantially reduce global warming.

Accepted Answer

The answer of Most scientists agree that
A)if global warming continues...

Question 5

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is
A)extremely high because policies that would significantly reduce emissions will adversely affect economic growth.
B)insignificant compared to the probable impact of warming from those emissions.
C)irrelevant because each aspect of the environment is important enough to justify full protection from environmental change, at whatever cost is necessary.
D)zero because fuel cost savings alone will offset all opportunity costs.

Accepted Answer

The answer of The opportunity cost of slowing global warming...

Question 6

Which of the following is true?
A)All types of environmental problems can be solved merely by the enforcement of individual property rights.
B)Environmental regulation cannot improve environmental quality.
C)Income levels exert little impact on the demand for environmental quality.
D)Markets often result in outcomes that are inefficient when it is difficult to assign and enforce property rights.

Accepted Answer

The statement that markets often result in outcomes that are inefficient when it is difficult to assign and enforce property rights is true because in cases where it is difficult to assign and enforce property rights, individuals and firms may not fully bear the costs or benefits of their actions resulting in market failures such as externalities or overuse of resources. Therefore, market solutions alone may not be sufficient to address environmental problems. A is false because property rights enforcement alone cannot solve all types of environmental problems, some of which may be collective action problems. B is false because environmental regulation can improve environmental quality, although there may be trade-offs between environmental protection and economic growth. C is false because income levels can influence the demand for environmental quality, with higher income individuals often demanding better environmental quality.

Question 7

Which of the following is an example of a deficiency caused by a regulatory approach to pollution?
A)ignored information provided by market signals
B)special interest influence on policies
C)lack of accountability by regulators for costs of regulation
D)all of the above

Accepted Answer

All of the options listed are examples of deficiencies caused by a regulatory approach to pollution. Ignoring market signals can lead to ineffective regulation, special interest influence can result in regulations that do not represent the public interest, and lack of accountability for regulation costs can lead to excessive burdens on industry and taxpayers.

Question 8

When it comes to environmental policy,
A)choices are influenced by the costs and benefits that decision makers expect.
B)values are subjective, as in other areas of the economy.
C)policy choices often have unintended secondary effects.
D)all of the above are true.

Accepted Answer

All of the given statements are true. When making environmental policy decisions, decision makers must weigh the expected costs and benefits of their choices. Additionally, values play a subjective role in policy decisions, as they do in other areas of the economy. Finally, policy choices can often have unintended secondary effects, such as changes in employment or economic activity.

Question 9

When it is difficult to assign and enforce property rights,
A)markets result in outcomes that are often inefficient.
B)courts can easily negotiate efficient outcomes.
C)establishing better property rights is always the best way to deal with environmental problems.
D)government regulation can never improve on the outcomes generated by competitive markets.

Accepted Answer

When property rights are unclear or unenforceable, there may be negative externalities or free rider problems which can lead to inefficient outcomes in markets. Therefore, markets may not always lead to optimal outcomes in these situations.

Question 10

Empirical evidence indicates that
A)changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide.
B)the increase in carbon dioxide, over thousands of years, is clearly the cause of global warming.
C)if global warming continues for another century, as most models forecast, the sea levels will clearly rise substantially, imposing costs much larger than the cost of preventing the warming.
D)the earth has warmed a little more than one degree Fahrenheit in the past century.

Accepted Answer

Empirical evidence supports that the earth has warmed a little more than one degree Fahrenheit in the past century. Choices A, B, and C are not clearly supported by empirical evidence.

Question 11

Besides the scientific uncertainties, which of the following has kept most economists from recommending strong regulations to reduce emissions of carbon dioxide?
A)consumer ignorance
B)the Kyoto Protocol
C)high costs and the potential for special-interest involvement in regulations
D)The Clean Air Act of 1990

Accepted Answer

Most economists have been hesitant to recommend strong regulations to reduce emissions of carbon dioxide due to the high costs involved and the potential for special-interest involvement in regulations. The Clean Air Act of 1990 has already set some regulations for air pollution, but carbon dioxide emissions are not specifically addressed in this act. The Kyoto Protocol is a global agreement to reduce greenhouse gas emissions, but not all countries have ratified it and some argue that it does not go far enough in reducing emissions. Consumer ignorance may play a role in the demand for environmentally-friendly products, but it is not the main reason why economists are hesitant to recommend strong regulations for carbon dioxide emissions.

Question 12

When is the definition and enforcement of property rights especially difficult?
A)when many polluters harm a large group of people by emitting the same pollutant
B)when a single polluter is harming a single person or entity
C)when land is owned by a corporation
D)when the benefits of prosecution are clear

Accepted Answer

When many polluters harm a large group of people by emitting the same pollutant, it can be difficult to identify individual responsibility and enforce property rights. It may be challenging to prove causation and assign liability to each individual polluter.

Question 13

"The United States should not sign the Kyoto Protocol, an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels." An economist should be expected to
A)disagree with this statement. The science on global warming is clearly known, and the Kyoto Protocol is the best, lowest cost, method to minimize the effects of global warming.
B)disagree with this statement. Even though much critical information is still missing, the Kyoto Protocol will certainly reduce carbon emissions enough to greatly reduce atmospheric warming.
C)agree with this statement. The benefits of a warming climate will unquestionably be greater than the costs.
D)probably agree with this statement. The costs of the Kyoto Protocol are great, and the expected impact from it on world temperatures over the next century is extremely small.

Accepted Answer

As an economist, the focus is on cost-benefit analysis. The cost of implementing the Kyoto Protocol is high and the expected impact on global temperatures is small, so an economist would likely agree with the statement that the United States should not sign the treaty.

Question 14

The current empirical evidence indicates that
A)changes in the earth's cloud cover will clearly enhance the warming effects of carbon dioxide.
B)the increase in carbon dioxide, over thousands of years, is definitely the cause of global warming.
C)if global warming continues as most models predict, then in the next 100 years the sea levels clearly will rise by more than 10 feet.
D)none of the above is true.

Accepted Answer

None of the statements are currently supported by empirical evidence. The effects of cloud cover on global warming are still being researched and debated, the cause of global warming is a complex issue with multiple factors, and while sea level rise is a concern, the magnitude of the rise is uncertain and depends on various factors such as melting of ice sheets and thermal expansion of seawater.

Question 15

Higher levels of carbon dioxide may have led, over the past century, to approximately a
A)1 degree (F) warming of the earth.
B)10 degree (F) warming of the earth.
C)1 degree (F) cooling of the earth.
D)10 degree (F) cooling of the earth.

Accepted Answer

There is scientific consensus that higher levels of carbon dioxide in the atmosphere have led to a warming of the earth's surface temperature by approximately 1 degree Fahrenheit (0.6 degrees Celsius) over the past century. This phenomenon is known as global warming.

Question 16

Which of the following would illustrate an example that leads to high transaction costs when dealing with pollution?
A)air quality in New York City
B)water pollution caused by a large number of firms at a location near the same river
C)noise pollution from aircraft near a busy airport
D)all of the above

Accepted Answer

The answer of Which of the following would illustrate an...

Question 17

Economic thinking indicates that efficient adaptation strategies to reduce harms from future global warming will
A)focus on reducing overall carbon emissions.
B)emphasize changes like those imposed on prosperous nations by the Kyoto Treaty.
C)focus on reducing the effects of serious problems that we know to exist.
D)ensure that every precaution will be taken to reduce any possible risks for the future.

Accepted Answer

The answer of Economic thinking indicates that efficient adaptation strategies...

Question 18

Which of the following is, so far, the most utilized method to reduce emissions of industrial pollution to politically chosen levels, while encouraging efficient choices by polluters?
A)government pollution charges or taxes
B)non-tradable emission standards that cap allowable pollution for each emitter
C)cap and trade emission permits
D)regulations that would effectively prohibit all emissions

Accepted Answer

Cap and trade emission permits allow for a flexible approach to reducing emissions by setting a cap on overall emissions while allowing companies to trade permits among themselves. This encourages efficient choices by allowing companies to choose the most cost-effective way to reduce emissions, while also incentivizing innovators to develop new ways to reduce pollution. This method has been successfully used in several countries, including the United States and European Union. Government pollution charges or taxes, and non-tradable emission standards that cap allowable pollution for each emitter, can also be effective, but may not be as flexible or incentivizing as cap and trade. Regulations that prohibit all emissions are not a realistic option as some level of emissions is necessary for industrial processes.

Question 19

Regarding wealth and environmental quality,
A)richer people are more willing to make sacrifices to gain greater environmental quality.
B)poor nations are less resilient when faced with the threats caused by environmental degradation.
C)richer people are more able to make sacrifices to gain greater environmental quality.
D)all of the above

Accepted Answer

The answer of Regarding wealth and environmental quality,
A)richer people are...

Question 20

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include
A)fuel-use reductions that would slow economic growth in most of the world.
B)economizing on energy use in ways that would, on balance, increase economic growth.
C)very few costs that would affect resource-conserving industrial nations such as the United States.
D)high costs in developing nations such as India but not in industrial nations.

Accepted Answer

The policies to slow global warming under the Kyoto Protocol would require fuel-use reductions, which would slow economic growth in most of the world. This would result in opportunity costs for countries that heavily rely on fossil fuels for their economic growth.

Quiz 27: Appendix: Difficult Environmental Cases and the Role of Government

Government regulation is

The burning of fossil fuels may cause global warming. Considering both the science and the reactions of crops, human health, and other factors across differing climates, economists generally agree that

It can be difficult to define and enforce property rights against damaging pollutants when

Most scientists agree that

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is

Which of the following is true?

Which of the following is an example of a deficiency caused by a regulatory approach to pollution?

When it comes to environmental policy,

When it is difficult to assign and enforce property rights,

Empirical evidence indicates that

Besides the scientific uncertainties, which of the following has kept most economists from recommending strong regulations to reduce emissions of carbon dioxide?

When is the definition and enforcement of property rights especially difficult?

"The United States should not sign the Kyoto Protocol, an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels." An economist should be expected to

The current empirical evidence indicates that

Higher levels of carbon dioxide may have led, over the past century, to approximately a

Which of the following would illustrate an example that leads to high transaction costs when dealing with pollution?

Economic thinking indicates that efficient adaptation strategies to reduce harms from future global warming will

Which of the following is, so far, the most utilized method to reduce emissions of industrial pollution to politically chosen levels, while encouraging efficient choices by polluters?

Regarding wealth and environmental quality,

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include