Natural Resource Economics
Exam Review
Course Introduction
Natural Resource Economics explores the efficient allocation and sustainable management of natural resources such as minerals, forests, water, fisheries, and energy from an economic perspective. The course examines the interaction between economic systems and the environment, focusing on concepts like scarcity, market failure, property rights, and externalities. Students will analyze models of resource extraction, renewable versus non-renewable resources, and the role of government policy in promoting sustainable development. Through case studies and real-world examples, the course highlights contemporary challenges and policy tools related to conservation, environmental regulation, and global resource markets.
Recommended Textbook
Environmental Economics 4th canadian Edition by Barry C Field
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20 Chapters
402 Verified Questions
402 Flashcards
Source URL: https://quizplus.com/study-set/2979
Page 2
Chapter 1: What Is Environmental Economics
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26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/59238
Sample Questions
Q1) Assume the natural environment including air,water and land can be used to produce either good X,Y or Z (but not all).If the value of use is $700 for good X,$600 for good Y and $400 for good Z,which good should be produced if the decision is based on economic efficiency?
Answer: Based on the objective of achieving economic efficiency,good X should be our choice since it maximizes the value of the end use for which resources are being employed.
Q2) Define the three different types of equity employed in environmental economics to help evaluate economic outcomes.
Answer: The three different types of equity employed in environmental economics include horizontal,vertical and intergenerational equity.Horizontal equity considers how people from similar economic circumstances such as rural and urban individuals from the same income bracket are impacted by a policy.Vertical equity considers how people from different economic circumstances such as wealthy and poor individuals living in the same area are impacted by a policy.Finally,intergenerational equity considers how a policy impacts individuals living in the present versus future generations.
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3
Chapter 2: The Economy and the Environment
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16 Verified Questions
16 Flashcards
Source URL: https://quizplus.com/quiz/59227
Sample Questions
Q1) Low-phosphate detergents,mercury-free thermometers and energy-efficient appliances are all examples of ________.
A)pollution-intensive goods
B)low-carbon goods
C)environmentally friendly goods
D)pollution-free goods
Answer: C
Q2) Continued extraction of a non-renewable resource can be sustainable over time if managed properly.
A)True
B)False
Answer: False
Q3) A living resource can become non-renewable if the rate of harvest exceeds the growth rate of the resource's stock.
A)True
B)False
Answer: True
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Chapter 3: Benefits and Costs, Supply and Demand
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16 Verified Questions
16 Flashcards
Source URL: https://quizplus.com/quiz/59225
Sample Questions
Q1) Suppose there are four individual firms in the market for a certain good.Firm 1's supply equation is Q<sup>S</sup> = 2P - 3,firm 2's supply equation is Q<sup>S</sup> = 0.5P - 3,firm 3's supply equation is Q<sup>S</sup> = 1.5P - 8 and firm 4's supply equation is Q<sup>S</sup> = 4P - 2.What is the aggregate supply equation for this market?
Answer: Aggregating the individual firm supply curves yields the market supply equation:Q<sup>S</sup> = 8P - 16.
Q2) Suppose there are three firms in the market for a certain good.Firm 1's marginal cost equation is MC = 2 + 1/3Q<sup>S</sup>,firm 2's marginal cost equation is MC = 4 + 2Q<sup>S</sup> and firm 3's marginal cost equation is MC = 10 + Q<sup>S</sup>.What is the aggregate supply equation for this market?
Answer: First we need to rewrite the marginal cost equations with quantity supplied on the left hand side to obtain the individual firms' supply curves so we can horizontally aggregate them.Firm 1's supply equation is Q<sup>S</sup> = 3P - 2,firm 2's supply equation is Q<sup>S</sup> = 1/2P - 2 and firm 3's supply equation is Q<sup>S</sup> = P - 10.Aggregating these yields the market supply equation:Q<sup>S</sup> = 9/2P - 14.
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Chapter 4: Economic Efficiency and Markets
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21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/59224
Sample Questions
Q1) When the rate of output is at the socially efficient level,the total willingness to pay is as large as possible.
At the socially efficient level of output net social value which is equal to total WTP minus total costs is as large as possible.
A)True
B)False
Q2) External costs can drive a wedge between the market demand curve and the social marginal WTP curve resulting in a market failure.
External costs drive a wedge between private marginal costs (i.e. ,the market supply curve)and social marginal costs.
A)True
B)False
Q3) External benefits can drive a wedge between the market demand curve and the social marginal WTP curve resulting in a market failure.
A)True
B)False
Q4) List three causes of market failure and give an example of each.
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Chapter 5: The Economics of Environmental Quality
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31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/59223
Sample Questions
Q1) Determining a target level of environmental quality is an example of _______.
A)positive policy analysis
B)positive economics
C)normative policy analysis
D)benefit-cost analysis
Q2) Suppose there are three polluting sources with MAC<sub>1</sub> = 750.25E,MAC<sub>2</sub> = 120 - 4E and MAC<sub>3</sub> = 50 - 0.5E.When MAC equals $20,the aggregate level of abatement for these sources would be _______.
A)impossible to determine from the information provided
B)150 units
C)305 units
D)555 units
Q3) Suppose there are three polluting sources with MAC<sub>1</sub> = 1004E,MAC<sub>2</sub> = 80 - 2E and MAC<sub>3</sub> = 60 - 0.5E.When MAC equals $10,the aggregate level of abatement for these sources would be _______.
A)175 units
B)157.5 units
C)212.5 units
D)impossible to determine from the information provided
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Page 7
Chapter 6: Frameworks of Analysis
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26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/59222
Sample Questions
Q1) Vertical equity treats people in the same circumstances identically. Horizontal equity treats people in the same circumstances identically.
A)True B)False
Q2) The socially efficient scale maximizes the net social benefits from a project. Net social benefits are maximized where MAC = MDC.
A)True B)False
Q3) List three criticisms that have been made about benefit-cost analysis.
Q4) Compute the discount factors you would need to conduct a benefit-cost analysis of the three sewage treatment options to two decimal places assuming a discount rate of 5%.Then conduct the benefit-cost analysis to determine which option the municipality should choose to complete when the discount rate is 5%.What option do you recommend and why?
Q5) Compute the discount factors you would need to conduct a benefit-cost analysis of the three sewage treatment options to two decimal places assuming a discount rate of 10%.Then conduct the benefit-cost analysis to determine which option the municipality should choose to complete when the discount rate is 10%.What option do you recommend and why?
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Chapter 7: Benefit-Cost Analysis: Benefits
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21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/59221
Sample Questions
Q1) List the four methods that can be used to impute willingness to pay for environmental improvements.
Q2) If a policy analyst imputes marginal willingness to pay for environmental quality to be equal to: MWTP = 245 - 1.5EQ,where EQ represents a measure of environmental quality,what is the change in consumer surplus associated with an increase in EQ from 60 to 70 units?
Q3) The benefits of improved environmental quality come about because of reduced damages.
A)True
B)False
Q4) It is possible to estimate ________ by considering information about reductions in worker productivity and medical expenditures.
A)demand for health care
B)health damages
C)output losses
D)willingness to pay for hospitals
Q5) List and very briefly discuss the strengths and weaknesses of contingent valuation methods for imputing WTP for environmental amenities.
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Chapter 8: Benefit-Cost Analysis: Costs
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20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/59220
Sample Questions
Q1) When environmental regulation of an entire industry results in output adjustments,the social cost of the regulation can be measured by the changes in consumer and producer surpluses.
A)True
B)False
Q2) Illegal roadside dumping resulting from the introduction of waste disposal charges is one example of the ________ of an environmental policy.
A)pollution control cost
B)enforcement cost
C)unintended consequences
D)before/after result
Q3) When evaluating proposals for building a new sewage treatment plant,a cost-benefit analysis does not have to include the cost of the land if it is to be donated. The analysis should include the opportunity cost related to the value the land would have in its next best use.
A)True
B)False
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Chapter 9: Criteria for Evaluating Environmental Policies
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8 Verified Questions
8 Flashcards
Source URL: https://quizplus.com/quiz/59219
Sample Questions
Q1) Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the idea that ________.
A)the polluter should pay
B)subsidies are politically unpalatable
C)subsidies can never be cost-effective
D)effluent taxes work better than subsidies
Q2) Policies that can be readily adapted to new information about damages,technological innovation and changing economic or social conditions are considered ________.
A)morally superior
B)politically expedient
C)fair
D)flexible
Q3) A cost-effective policy is always socially efficient.
If a cost-effective policy results in a level of emissions that differs from the socially efficient level of emissions then it is not socially efficient.
A)True
B)False
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11
Chapter 10: Decentralized Policies: Liability Laws, Property
Rights, Voluntary Action
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20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/59237
Sample Questions
Q1) If the MAC and MD curves do not change based on who has the property rights,the same socially efficient equilibrium will be reached independent of who holds the rights to pollute.
A)True
B)False
Q2) Define green goods and give two examples of green goods.
Q3) Goods that give the same level of pleasure as ordinary goods but that involve less environmental damage in either their production,use or disposal are known as ________.
A)generic goods
B)luxury goods
C)green goods
D)environmental goods
Q4) ________ suggest(s)that in the presence of an externality bargaining can achieve the socially efficient equilibrium regardless of the initial allocation of property rights.
A)Liability laws
B)The Coase theorem
C)The legal doctrine of standing
D)The burden of proof
Chapter 11: Command-And-Control Strategies: the Case of Standards
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24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/59236
Sample Questions
Q1) Standards will be cost effective when they equate the level of emissions at each source.
This would only be true in the unlikely event that each source had identical marginal abatement cost functions.
A)True
B)False
Q2) Standards that take the form of never-exceed levels for specific pollutants in an ambient environment are known as ________.
A)emission standards
B)ambient standards
C)performance standards
D)technology-based standards
Q3) In order to set individual standards in accordance with the equimarginal principle,regulators would have to know the marginal abatement cost relationship for each polluting source.
The informational requirements to set cost-effective standards are very high.
A)True
B)False
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Chapter 12: Incentive-Based Strategies: Emission Charges and Subsidies
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26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/59235
Sample Questions
Q1) Suppose a polluting firm has MAC = 500 -E.Calculate the firm's level of emissions,abatement and total compliance cost if it faced an effluent fee of $200 per unit of emissions.
The firm will emit where MAC = tax:
500 - E = 200
E = 300
Abatement will equal the unregulated level of emissions minus emissions of 300.Unregulated emissions are found where MAC = 0:
500 - E<sub>0</sub> = 0
E<sub>0</sub> = 500
So abatement equals 200 units.The total compliance cost of the firm will equal the sum of its total abatement cost and the emission taxes it pays.Total abatement cost is the area under the MAC curve from emissions of 300 to emissions of 500:
TAC = ½(200 * 200)= $20,000
Total taxes paid will equal the level of emissions times the tax of $200 per unit of emissions:
Taxes paid = 200 * 300 = $60,000
Total compliance cost of the firm is therefore $80,000.
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Page 14
Chapter 13: Incentive-Based Strategies: Transferable Discharge Permits
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15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/59234
Sample Questions
Q1) Transferable emission permit schemes provide the same incentive to invest in R&D to find cheaper methods of reducing emissions as emission taxes that achieve the same level of abatement.
A)True
B)False
Q2) The EPA's TEP market allowed firms to use whatever means they found the cheapest to reduce SO<sub>2</sub> emissions rather than dictating the technology to be used.
A)True
B)False
Q3) Briefly explain why firms have an incentive to monitor each other's permit usage under a transferable emission permit scheme.
Q4) The EPA's TEP program for SO<sub>2</sub> gave producers an incentive to look for cheaper ways of lowering emissions because increasing scarcity of permits drove their price up.
A)True
B)False
Q5) Briefly explain why firms have an incentive to monitor each other's permit usage under a transferable emission permit scheme.
Page 15
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Chapter 14: Federal Water Pollution - Control Policy
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12 Verified Questions
12 Flashcards
Source URL: https://quizplus.com/quiz/59233
Sample Questions
Q1) Under a tax,a polluter has no incentive to reveal an excessively high MAC relative to its true MAC.
A)True
B)False
Q2) Compare the total social costs and total private compliance costs by source and for the entire industry of a $72 emission tax versus a uniform standard that achieves the same level of industry abatement as the tax.
Q3) When there is uncertainty about the marginal abatement cost curve,the steeper the marginal damage cost curve,the closer a standard or transferable emissions program will be to the socially efficient equilibrium than a tax.
A)True
B)False
Q4) Individual standards have the same informational requirements as uniform standards.
Individual standards require knowledge of each firm's marginal abatement cost functions as well as the marginal damage cost.
A)True
B)False
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Chapter 15: Federal Air Pollution - Control Policy
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19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/59232
Sample Questions
Q1) Environment Canada's mandate is under the control of the governing party so its effectiveness in dealing with environmental problems is limited by the government's interest in the environment.
A)True
B)False
Q2) CCME stands for ________.
A)Canadian Council of the Ministry of Environment
B)Climate Change in Mountain Ecosystems
C)Canadian Council of Ministers of the Environment
D)Canadian Conference of the Ministry of Environment
Q3) List the powers granted to the provinces under the Constitution Act.
Q4) When both the provinces and the federal government have laws over the same area this is known as ________ and the doctrine of ________ describes the situation where federal law takes precedence over provincial law when the laws are in conflict.
A)concurrency;paramountcy
B)concurrency;legitimate expectations
C)paramountcy;concurrency
D)double jeopardy;paramountcy
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17
Chapter 16: Federal Policy on Toxic and Hazardous Substances
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16 Verified Questions
16 Flashcards
Source URL: https://quizplus.com/quiz/59231
Sample Questions
Q1) Technology-based standards are frequently used in the context of regulating water pollution,but they will be cost-effective only if all the regulated plants in each category
A)have identical marginal damages
B)have exactly the same marginal abatement costs
C)manufacture the same end products
D)install the same pollution control equipment
Q2) The federal government has the jurisdiction to ban or severely limit the release of toxic substances such as dioxans and furans into any waterways under the authority of the Canada Water Act.
If the federal government has the power under the Fisheries Act to regulate toxic substances like dioxans and furans that are harmful to fish populations.
A)True
B)False
Q3) Why have few Canadian policies dealing with water-pollution problems stemming from nonpoint-source emissions been implemented? How might different types of pollution-control policies be employed in the case of nonpoint-source emissions?
Q4) List the three roles the federal government plays in water-pollution regulation.
Page 18
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Chapter 17: State and Local Environmental Issues
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18 Verified Questions
18 Flashcards
Source URL: https://quizplus.com/quiz/59230
Sample Questions
Q1) In order to address the non-degradation dilemma,amendments to the U.S.HYPERLINK "" Clean Air Act enacted stricter technology-based emission standards for non-attainment areas than for "prevention of serious deterioration" (PSD)areas. PSD areas have stricter regulations to maintain the higher existing air quality in these areas in order to avoid the non-degradation dilemma.
A)True
B)False
Q2) Governments may inadvertently slow up the rate of adoption of new pollution-abatement technologies through the use of new-source bias in the setting of emission standards.
A)True
B)False
Q3) Unlike an emission tax,a fuel tax would provide a direct incentive for drivers to worry about their level of emissions thus creating an incentive to lower them.
A)True
B)False
Q4) Describe the Canada-Wide Acid Rain Strategy for Post-2000.
Q5) List the "Big Five" criteria air contaminants to which Canadians are exposed.
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Chapter 18: Comparative Environmental Policies
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22 Verified Questions
22 Flashcards
Source URL: https://quizplus.com/quiz/59229
Sample Questions
Q1) Briefly describe the two-part fee structure of the B.C.waste permit fee system for hazardous waste.
The first part of the fee is a flat rate annual fee that is a licensing charge of $100 per medium for authorized discharges into air,water,for refuse,and storage.The second part of the fee is a variable fee based on authorized discharges times a unit fee per tonne discharged.These fees are set for each waste product and are based on the government's assessment of the risks of the contaminant to the environment,as well as the administrative costs of the program.
Q2) What is CERCLA and what are the main features of this program?
Q3) Because dioxans and furans ________ the impact of banning these substances on environmental quality is ________.
A)biodegrade;uncertain
B)biodegrade;a success story
C)bioaccumulate;uncertain
D)bioaccumulate;a success story
Q4) Provide a brief critical assessment of the Canadian Environmental Protection Act.
Q5) List two problems with using incentive-based policies to deal with hazardous wastes in Canada.
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Chapter 19: Economic Development and the Environment
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24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/59228
Sample Questions
Q1) Many contemporary land-use issues are related to the human use of land that substantially reduces or destroys its environmental value.List four examples of Canadian natural capital threatened by land-use changes.
Q2) Taxing production is one way to get firms to produce the socially efficient level of a waste-generating good.
A)True
B)False
Q3) A per unit tax equal to P<sub>1</sub> - P<sub>3</sub> would result in firms producing the socially efficient level of a waste-generating good.
A)True
B)False
Q4) The ability of a municipality to send solid waste to a landfill is affected by the scarcity of sites willing to accept these wastes.
A)True
B)False
Q5) List two ways that material intensity can be reduced and give an example of each.
Q6) Define the reuse ratio and list three ways it can be increased.
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Page 21
Chapter 20: The Global Environment
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21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/59226
Sample Questions
Q1) ________ is a particular problem in ________ which contain a disproportionately large share of the world's wild species,but which are also under great pressure to pursue modern economic development.
A)Habitat destruction;developed countries
B)Habitat destruction;developing countries
C)Biological uniformity;developed countries
D)Biological uniformity;developing countries
Q2) If permits are distributed through an auction,governments can recycle the revenue in the form of tax cuts to offset some losses experienced by firms.
A)True
B)False
Q3) Employing a global CO<sub>2</sub> price to contain mean projected warming to a specific target at least cost is an example of ________.
A)a fiscal dividend
B)a climate stabilization goal
C)a cap and trade system
D)an emission trading system
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