Environmental Economics Practice Exam
Course Introduction
Environmental Economics explores the relationship between economic activity and the environment, focusing on how economic principles can be applied to address environmental challenges. The course examines market failures such as externalities, the valuation of natural resources, the design and impact of environmental policies, and methods for cost-benefit analysis. Students will analyze policy tools such as taxes, tradable permits, and regulations to manage environmental resources efficiently and sustainably, while considering the trade-offs between economic development and environmental protection.
Recommended Textbook
Environmental Economics and Management Theory Policy and Applications 6th Edition by Scott
Available Study Resources on Quizplus
21 Chapters
884 Verified Questions
884 Flashcards
Source URL: https://quizplus.com/study-set/3695 Page 2
Chapter 1: The Role of Economics in Environmental Management
Available Study Resources on Quizplus for this Chatper
42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/73551
Sample Questions
Q1) In the Circular Flow Model, money flows are disregarded.
A)True
B)False
Answer: False
Q2) Briefly explain why China's environment has declined so severely, and find an article or two from the popular press that updates the progress in reversing the trend.
Answer: Correct responses should address China's rapid economic growth rate, as discussed in the boxed Application, its large size, which adds to total abatement costs, and the fact that China's clean-up efforts are focused mainly on large urban centers, which leaves rural communities and smaller cities facing serious environmental decline. Media coverage of China's economic growth and environmental pollution problems has been extensive, so students should find sufficient evidence, at least anecdotally, on current efforts and progress to date.
Q3) Natural pollutants
A) include such releases as hazardous chemical wastes
B) arise from nonartificial processes in nature, such as pollen
C) refer to those associated with human activity such as fossil-fuel combustion
D) all of the above
Answer: B
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Modeling the Market Process: a Review of the Basics
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/73552
Sample Questions
Q1) The sum of the change in consumer surplus plus the change in producer surplus is called deadweight loss to society.
A)True
B)False
Answer: True
Q2) If a perfectly competitive firm is a profit-maximizer, it produces where
A) MR > MC
B) P > MR
C) P = MC
D) TR = TC
Answer: C
Q3) Equilibrium price is the price level at which Q<sub>D</sub> equals Q<sub>S</sub>.
A)True
B)False
Answer: True
Q4) A change in price results in a shift in the demand curve.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Modeling Market Failure
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/73553
Sample Questions
Q1) The market demand for a public good such as environmental quality is found as the horizontal sum of all the individual demands for that good.
A)True
B)False
Answer: False
Q2) If market is defined as a good or service whose production or consumption generates environmental damage, then the market failure is due to a negative externality.
A)True
B)False Answer: True
Q3) At an efficient equilibrium, MSB = MSC, which implies that M = MEC.
A)True
B)False
Answer: True
Q4) At a competitive equilibrium, M = 0, but at an efficient equilibrium MEC = 0.
A)True
B)False Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Conventional Solutions to Environmental
Problems: Command-And-Control Approach
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/73554
Sample Questions
Q1) The marginal social benefit (MSB) of abatement represents
A) the additional gains to society from reducing pollution
B) the reduction in damages from abatement
C) society's demand for abatement or environmental quality
D) all of the above
Q2) A technology-based standard
A) specifies a pollution limit to be achieved and allows polluters to choose the technology to reach that limit
B) is more flexible than a performance-based standard
C) designates the equipment or control method to be used for pollution abatement
D) assures the use of the least-cost abatement technology.
Q3) An ambient standard
A) specifies a pollution limit and lets polluters choose the technology to achieve that limit
B) designates the equipment or control method that must be used to abate pollution
C) assures that the least-cost abatement approach will be used by all polluters
D) none of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Economic Solutions to Environmental Problems: the
Market Approach
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/73555
Sample Questions
Q1) A pollution permit trading system
A) is not a market-oriented policy instrument
B) is used to combat acid rain in the United States C) is not viable on an international level D) is not capable of achieving a cost-effective solution
Q2) If Firm X is abating 9 units with an MACS1U1B1XS1U1B0 = 0.6AS1U1B1XS1U1B0 , and Firm Y is abating 11 units with an MACS1U1B1YS1U1B0 = 0.9AS1U1B1YS1U1B0 , then Firm Y should do less of the abating and Firm X should do more in order to lower the overall costs of abatement.
A)True
B)False
Q3) To effectively internalize the externality, the deposit component of a deposit-refund system must raise the MPC of illegal waste disposal by the MEC measured at the competitive output level.
A)True
B)False
Q4) A payment or tax concession aimed at lowering the cost of abating is called a pollution charge.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Environmental Risk Analysis
Available Study Resources on Quizplus for this Chatper
51 Verified Questions
51 Flashcards
Source URL: https://quizplus.com/quiz/73556
Sample Questions
Q1) Which of the following is NOT part of a risk characterization?
A) a qualitative component that includes a description of the hazard
B) a monetary component that assigns a dollar value to the risk
C) a quantitative component that gives the magnitude of the risk
D) an integrated analysis of the overall risk assessment process
Q2) Risk assessment refers to only the quantitative evaluation of risk.
A)True
B)False
Q3) Dose-response functions for environmental hazards
A) always have thresholds
B) are strictly linear
C) must arise from the origin
D) none of the above
Q4) According to the textbook application, the EPA reported in 1993 that
A) secondhand smoke was a carcinogen
B) secondhand smoke was prohibited from public places
C) secondhand smoke did not pose a human health risk
D) none of the above
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Assessing Benefits for Environmental Decision Making
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/73557
Sample Questions
Q1) The approach that estimates benefits according to a technical relationship between a resource and a user of the resource is called the behavioral linkage approach. A)True
B)False
Q2) The benefit estimation method that relies on goods that are complements to environmental quality is the averting expenditure method.
A)True
B)False
Q3) The averting expenditures method
A) uses spending changes on goods that act as substitutes for environmental quality
B) defines personal environmental quality as the relevant market
C) has the disadvantage of jointness of production, which biases the benefit estimate D) all of the above
Q4) There is some debate about whether secondary benefits should be considered when assessing public policy proposals. Identify two reasons why secondary benefits might be excluded from a benefit-cost analysis of proposed environmental policy.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Assessing Costs for Environmental Decision Making
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/73558
Sample Questions
Q1) The social costs associated with some policy initiative are
A) readily identified
B) described as the spending needed to compensate society for the resources used so that its utility level is maintained
C) must account for all price, output, and income effects linked to that initiative
D) all of the above
E) (b) and (c) only
Q2) Incremental costs
A) are the total costs of abatement and regulation linked to environmental policy
B) include only explicit costs
C) refer to the change in costs associated with an environmental policy initiative
D) include only implicit costs
Q3) Incremental cost assessment involves
A) valuing TSC at a single level of abatement
B) subtracting baseline TSC prior to undertaking policy from post-policy TSC
C) summing baseline TSC and post-policy TSC
D) finding the ratio of TSC to MSC at a given abatement level
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Benefit-Cost Analysis in Environmental Decision Making
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/73559
Sample Questions
Q1) Among the chief concerns about the use of benefit-cost analysis is that
A) monetizing the benefits of a policy proposal is difficult
B) identifying and estimating implicit costs is a major challenge
C) equity might not be achieved if, for example, costs are distributed unevenly
D) all of the above
E) none of the above
Q2) Who was the first U.S. president to explicitly refer to the efficiency criterion as part of the regulatory review process?
A) President Clinton
B) President George W. Bush
C) President Reagan
D) President Obama
Q3) To achieve cost-effectiveness among options that satisfy the benefit objective
A) both PVB and PVC must be minimized
B) PVB must be minimized and PVC must be maximized
C) PVC must be minimized
D) none of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Defining Air Quality: the Standard-Setting Process
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/73560
Sample Questions
Q1) An important observation about the NAAQS is that
A) they are set at the regional level to recognize different demographics and traffic patterns
B) all regions must meet the same standard, making efficiency achievement highly unlikely
C) they are uniform across all regions including PSD areas
D) they have been amended to include GHG air pollutants
Q2) The more stringent standards in PSD areas do not necessarily result in an efficient level of abatement in those regions.
A)True
B)False
Q3) Portney's research of the 1990 Clean Air Act Amendments (CAAA) finds that MSC exceeds MSB. Based on this finding, one can conclude that A) the CAAA are allocatively efficient
B) TSC exceed TSB
C) these amendments are inefficient but cost-effective
D) the CAAA over-regulate society
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Improving Air Quality: Controlling Mobile
Sources
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/73561
Sample Questions
Q1) Reformulated gasoline
A) refers specifically to ethanol (10)
B) includes enhanced oxygen to enhance combustion
C) refers to formulations that release less hydrocarbons, toxics, and CO than conventional gasoline
D) includes large amounts of MTBE
Q2) Photochemical smog is caused by a chemical reaction involving criteria pollutants in the presence of sunlight.
A)True
B)False
Q3) Tax credits at the federal level are currently available for both hybrids and plug-in electric hybrids.
A)True
B)False
Q4) Among all identified transportation sources, off highway vehicle emissions are the largest contributors to the formation of photochemical smog.
A)True
B)False
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Improving Air Quality: Controlling Stationary
Sources
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/73562
Sample Questions
Q1) Acidic deposition arises when
A) VOCs mix with carbon dioxide in the atmosphere and fall to earth as rain or snow
B) carbon monoxide and sulfur dioxide combine to form acidic deposits
C) sulfur and nitrogen oxides mix with other particles and fall to earth as rain, snow, or fog
D) carbon dioxide and nitrogen oxides combine and reach the earth in precipitation
Q2) Because NO<sub>X</sub> readily moves across state borders, a series of interstate collaborations formed over time to address the problem, but none established a trading program.
A)True
B)False
Q3) Technology-based standards used to control new sources are more lenient than those used to control existing stationary sources.
A)True
B)False
Q4) Explain why the current abatement levels for the two sources do not achieve cost effectiveness.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Global Air Quality: Policies for Ozone Depletion and Climate Change
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/73563
Sample Questions
Q1) The U.S. federal government has enacted a nationwide carbon tax to reduce carbon dioxide emissions.
A)True
B)False
Q2) The "greenhouse effect" is a natural phenomenon.
A)True
B)False
Q3) What is the equilibrium price and quantity of CFC-11 after the excise tax?
A) P = $8.75; Q = 6.875
B) P = $7.5; Q = 8.75
C) P = 6.875; Q = 8.75
D) none of the above
Q4) According to the Regulatory Impact Analysis (RIA) of the phaseout plan for ozone-depleting substances, the associated costs exceed the expected benefits.
A)True
B)False
Q5) The largest "hole" in the earth's ozone layer occurs over North America.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Defining Water Quality: the Standard-Setting Process
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/73564
Sample Questions
Q1) According to the benefit-cost analysis of the Clean Water Act presented in the text, water quality standards set by the Clean Water Act are too stringent.
A)True
B)False
Q2) Among the three major goals defined in the Clean Water Act are the
A) fishable-boatable goal
B) use designation goal
C) no toxics in toxic amounts goal
D) no ocean dumping goal
Q3) An aquifer refers to any water body exposed to the atmosphere.
A)True
B)False
Q4) According to the textbook application, point source pollution has been eliminated from the Chesapeake Bay.
A)True
B)False
Q5) Mercury is the leading pollutant for U.S. bays and estuaries.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Improving Water Quality: Controlling Point and Nonpoint
Sources
Available Study Resources on Quizplus for this Chatper
51 Verified Questions
51 Flashcards
Source URL: https://quizplus.com/quiz/73565
Sample Questions
Q1) From an economic perspective, the zero discharge goal meets the efficiency criterion by accounting for both the benefits and costs of that objective.
A)True
B)False
Q2) Tradeable effluent permit markets can lead to cost savings as long as polluting sources face different marginal abatement costs to control the same pollutant.
A)True
B)False
Q3) The technology-based effluent limitations are actually performance-based standards.
A)True
B)False
Q4) An advantage of the effluent limitations is that they are aligned with the national water quality objectives.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Protecting Safe Drinking Water
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/73566
Sample Questions
Q1) An increasing block pricing structure for water supplies
A) creates an economic incentive to conserve water usage
B) charges a higher price for lower levels of water consumption
C) does not reflect the underpinnings of benefit-cost analysis
D) ignores the marginal cost of water consumption
Q2) Among the criteria used for identifying priority contaminants is that
A) the pollutant must occur in a private water system
B) the contaminant might have a negative effect on the ecology
C) the pollutant must be a microorganism
D) the contaminant may have an adverse effect on human health
E) none of the above
Q3) According to the textbook application
A) drinking water aboard commercial aircraft is completely unregulated
B) aircraft drinking water supplies are controlled jointly by the Food and Drug Administration (FDA) and the Federal Aviation Administration (FAA)
C) random testing of aircraft drinking water in 2004 indicated that no harmful contaminants were present
D) none of the above
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Managing Hazardous Solid Waste and Waste Sites
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/73567
Sample Questions
Q1) Lack of good information was among the issues facing the United States as it began to address the hazardous waste site problem in the nation.
A)True
B)False
Q2) The Brownfields Act was passed during the Obama administration and deals with abandoned properties whose redevelopment is compromised by contamination.
A)True
B)False
Q3) The series of events that begins with waste generation and continues through transport, storage, treatment, and disposal is known as
A) the "cradle to grave" management system
B) the waste manifest system
C) the waste stream
D) the Superfund cleanup process
Q4) To establish legal responsibility under the Superfund Act, courts use strict liability as well as joint and several liability.
A)True
B)False
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Managing Municipal Solid Waste
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/73568
Sample Questions
Q1) Suppose you are a public official responsible for setting a retail disposal charge on antifreeze. Estimated marginal benefit and cost functions for antifreeze are as follows:
MPB = 10.0 - 0.5Q MPC = MSC = 1.0 + 0.4Q
MSB = 10.0 - 1.1Q, where MPB, MSB, and MPC are measured in dollars per gallon, and Q is in millions of gallons.
a. Identify the Marginal External Benefit (MEB) function, and briefly explain what this function is measuring.
b. In the absence of government intervention, find the equilibrium price (P<sub>C</sub>) and Quantity (Q<sub>C</sub>) being exchanged in the antifreeze market?
c. Determine the retail disposal charge that will produce an efficient allocation of antifreeze.
Q2) The dollar value of a waste-end charge that would achieve efficiency in this market is
A) $7.60
B) $11
C) $9.5
D) none of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 19: Controlling Pesticides and Toxic Chemicals
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/73569
Sample Questions
Q1) Pesticide reregistration refers to a reevaluation of a previously licensed pesticide that is already on the market.
A)True
B)False
Q2) Under FIFRA,
A) only benefits are considered in determining whether a pesticide can be sold
B) registration of a pesticide is denied if it is linked to unreasonable adverse effects on the environment
C) a pesticide registration is contingent upon only the risks associated with that substance
D) benefits are the dominant factor in registration decisions
Q3) The negative externality in a pesticide or other chemical market
A) is associated mainly with production of the chemical
B) is primarily a consumption externality
C) should be modeled as a marginal external cost (MEC)
D) is appropriately captured by the MSC function
Q4) The Food Quality Protection Act (FQPA) amended FIFRA and TSCA.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Sustainable Development: International Environmental Agreements
and International Trade
Available Study Resources on Quizplus for this Chatper
33 Verified Questions
33 Flashcards
Source URL: https://quizplus.com/quiz/73570
Sample Questions
Q1) The Montreal Protocol and its amendments address the phase out of those chemicals primarily responsible for climate change.
A)True
B)False
Q2) Nobel Laureate Robert Solow argues that sustainable development is a good concept to guide national policy.
A)True
B)False
Q3) The Border 2012 Program involving the United States and Mexico has a broad agenda, including improving air and water quality, tracking hazardous waste, and promoting pollution prevention.
A)True
B)False
Q4) The United States ratified the Kyoto Protocol in 2001 during the Bush administration.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 22
Chapter 21: Sustainable Approaches: Industrial Ecology and
Pollution Prevention
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/73571
Sample Questions
Q1) ISO 14000 refers to mandatory internationals standards for environmental management.
A)True
B)False
Q2) Design for the Environment (DfE) is a government-mandated program that promotes environmental considerations as part of the design and development of products.
A)True
B)False
Q3) A closed flow of materials is one in which residuals are returned to the production process.
A)True
B)False
Q4) Industrial ecology and sustainable development are equivalent concepts.
A)True
B)False
Q5) A major component of the ISO 14000 standards addresses life cycle assessments.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 23