Question 1

Marginal social benefit (MSB) of abatement can be thought of as the reduction in damages linked to reducing pollution.

Accepted Answer

Marginal social benefit (MSB) of abatement refers to the additional benefit to society from reducing pollution by one unit. It can be measured as the reduction in damages linked to reducing pollution. Therefore, the given statement is true.

Question 2

If an abatement standard is set to satisfy allocative efficiency on a national scale, that standard would not be optimal at the regional level unless the national MSB and MSC functions were identical to those at the regional level.

Accepted Answer

Allocative efficiency is achieved when the marginal social benefit (MSB) equals the marginal social cost (MSC) at the national level. However, regional MSB and MSC functions could differ from the national functions, making the abatement standard less optimal at the regional level.

Question 3

The command-and-control approach to environmental policy uses rules, emissions limits, and various incentive-based policy instruments.

Accepted Answer

The command-and-control approach to environmental policy primarily uses rules and emissions limits but does not typically include incentive-based policy instruments, which are characteristic of market-based approaches.

Question 4

Among the reasons that may explain why abatement standards are not set efficiently is imperfect information.

Accepted Answer

Imperfect information can lead to imperfect abatement standards being set, as decision makers may not have accurate or complete information on the costs and benefits of different levels of abatement. This can result in either over- or under- regulation, which can be inefficient and costly.

Question 5

Standards are the fundamental basis of most environmental policies.

Accepted Answer

Standards, which are usually set by governmental or international bodies, are used to establish acceptable levels of environmental performance in areas such as air and water quality, waste management, and energy efficiency. These standards are then used as the basis for many environmental policies and regulations aimed at protecting human health and the environment.

Question 6

Suppose the combined abatement standard is set at 22 units and firm J and firm K have MAC functions of MAC_J = 0.5A, and MAC_K = 0.75A, respectively. If firm J is abating 10 units and firm K is abating 12 units, firm K should abate more units and firm J should abate less.

Accepted Answer

To determine the optimal allocation of abatement between two firms, we need to compare their marginal abatement costs (MACs) and allocate reductions in a way that equalizes their marginal costs. If both firms are currently abating less than the combined abatement standard and have different MACs, the firm with the lower MAC should abate more while the firm with the higher MAC should abate less. In this case, firm J has a MAC of 0.5A while firm K has a MAC of 0.75A. Therefore, firm K should abate more units than firm J to achieve the efficient allocation and equalize their marginal costs. Therefore, the statement is true.

Question 7

According to the cost-effectiveness criterion, all polluting sources would abate pollution up to the point where their individual abatement levels were equal.

Accepted Answer

According to the cost-effectiveness criterion, all polluting sources would abate pollution up to the point where their marginal abatement costs are equal, not necessarily their total abatement levels.

Question 8

Environmental standards can be specified as

Accepted Answer

Environmental standards can be specified as ambient standards, which set a limit on the concentration of a pollutant in the environment, performance-based standards, which specify a desired outcome but leave it up to the polluter to determine the best way to achieve that outcome, and technology-based standards, which require the use of specific pollution control technologies. Therefore, all of the above choices are correct.

Question 9

A standard that specifies a pollution limit along with the equipment to be used to achieve that limit is called a performance-based standard.

Accepted Answer

A performance-based standard specifies a pollution limit or outcome but typically does not dictate the specific equipment or methods to be used to achieve that limit, allowing for flexibility in how the standard is met.

Question 10

By definition, the marginal abatement cost (MAC) curve shows the change in costs associated with higher levels of abatement, using the most widely available technology.

Accepted Answer

The Marginal Abatement Cost (MAC) curve shows the cost associated with eliminating an additional unit of pollution, but it does not specify that it uses the most widely available technology. It can represent costs for a range of technologies, from the most basic to the most advanced.

Question 11

If the MACs for firm 1 and 2 are: MAC₁ = 0.4A₁ and MAC₂ = 0.8A₂, respectively, and the combined abatement standard is 15 units, then the cost-effective abatement levels are 10 units for firm 1 and 5 units for firm 2.

Accepted Answer

This is the correct calculation based on the given MACs and the combined abatement standard.

Question 12

The sum of all polluters' MACs equals the marginal social cost (MSC) of abatement.

Accepted Answer

The sum of all polluters' Marginal Abatement Costs (MACs) does not equal the Marginal Social Cost (MSC) of abatement. The MSC of abatement is the cost to society of reducing pollution by one additional unit, which can differ from the sum of individual MACs, as it includes external costs not borne by the polluters.

Question 13

If a standard is set to balance the well-being of society with the associated costs, it is called a benefit-based standard.

Accepted Answer

A standard set to balance the well-being of society with the associated costs is called a cost-benefit standard. Benefit-based standards focus primarily on the benefits without necessarily balancing them against the costs.

Question 14

If an environmental standard is set at a level where the associated marginal abatement cost (MAC) is equal to the marginal social benefit (MSB), it is considered an allocatively efficient standard.

Accepted Answer

The answer of If an environmental standard is set at...

Question 15

According to the cost-effective abatement criterion, all polluting sources would abate pollution up to the point where their individual total abatement cost (TAC) levels were equal.

Accepted Answer

The cost-effective abatement criterion suggests that polluting sources should abate pollution up to the point where their marginal abatement costs (MAC) are equal, not their total abatement costs (TAC).

Question 16

A standard that identifies a pollution limit to be achieved without defining the technology to be used is called a(n)

Accepted Answer

Performance-based standards specify the outcomes or performance levels that must be achieved but do not dictate the specific technology or methods to be used to meet those outcomes. This allows for flexibility in how the standards are met.

Question 17

Ambient standards identify the desired level of environmental level to be achieved, typically expressed as a maximum allowable concentration of a pollutant.

Accepted Answer

This statement is true. Ambient standards set a limit for the concentration of a pollutant in the atmosphere or in any other environment. They aim to protect public health and the environment by specifying a level that is safe for human exposure or ecological systems.

Question 18

The marginal cost of enforcement (MCE) must be added vertically to the MAC_mkt to derive the marginal social cost (MSC) of abatement function.

Accepted Answer

This statement is true as marginal cost of enforcement (MCE) is an additional cost incurred to enforce regulations on pollution abatement. When added to the marginal abatement cost (MAC_mkt), it gives the total cost of reducing pollution, which is the marginal social cost (MSC).

Question 19

According to the cost-effectiveness criterion, all polluting sources would abate pollution to the point where their individual marginal abatement cost (MAC) levels were equal.

Accepted Answer

The cost-effectiveness criterion suggests that in order to achieve the most efficient overall reduction of pollution, all polluting sources should reduce their pollution levels until their individual marginal abatement costs are equal. This ensures that the overall cost of reducing pollution is minimized, while still achieving the desired level of pollution reduction.

Question 20

Much of the air pollution in Catano, Puerto Rico was linked to a nearby oil refinery.

Accepted Answer

The answer of Much of the air pollution in Catano,...

Quiz 4: Conventional Solutions to Environmental Problems: Command-And-Control Approach