Natural Resource Economics
Test Preparation
Course Introduction
Natural Resource Economics explores the allocation, utilization, and conservation of natural resources from an economic perspective. This course examines the fundamental principles that govern how societies manage resources such as minerals, forests, water, fisheries, and energy, with a focus on sustainable development. Students will analyze the balance between resource extraction and environmental protection, assess the role of market and government interventions, and consider the economic impacts of resource scarcity and environmental policies. Combining theoretical models with real-world case studies, the course provides tools for evaluating policy options and promoting efficient and equitable resource use for current and future generations.
Recommended Textbook
Environmental Economics and Management Theory Policy and Applications 6th Edition by Scott
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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
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42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/73551
Sample Questions
Q1) All of the following are examples of nonpoint source pollution EXCEPT
A) urban runoff
B) sulfur emissions from power plants
C) agricultural runoff
D) snowmelt from city streets
Answer: B
Q2) Environmental economics
A) is concerned mainly with the residual flow from economic activity back to nature
B) focuses on the flow of resources from nature to economic activity
C) recognizes that the flow of residuals back to nature is preventable
D) none of the above
Answer: A
Q3) Anthropogenic pollutants
A) arise from natural processes in nature, like particles from volcanic eruptions
B) are contaminants linked to human activity
C) are those released only from nonpoint sources
D) are of minimal concern to environmental economists
Answer: B
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Chapter 2: Modeling the Market Process: a Review of the Basics
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46 Verified Questions
46 Flashcards
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Sample Questions
Q1) A change in price results in a shift in the demand curve.
A)True
B)False Answer: False
Q2) Cost-effectiveness requires that resources are allocated such that the additional benefits to society are equal to the additional costs.
A)True
B)False Answer: False
Q3) If a firm maximizes output from a stock of available resources, it must be achieving allocative efficiency.
A)True
B)False Answer: False
Q4) Conventionally, the graph of demand uses the inverse form of the demand function, which is P = f(Q<sub>D</sub>).
A)True
B)False Answer: True
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Chapter 3: Modeling Market Failure
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) Environmental pollution can be characterized as a market failure that distorts the classical market outcome.
A)True
B)False
Answer: True
Q2) If a good has the characteristic of nonrivalness, it means that A) the good is publicly provided
B) it is impossible to prevent others from sharing the benefits of consumption C) the benefits linked to consumption are indivisible
D) none of the above
Answer: C
Q3) Based on the model, the price at the efficient equilibrium is
A) P<sub>E</sub> = $18
B) P<sub>E</sub> = $22.50
C) P<sub>E</sub> = $20
D) P<sub>E</sub> = $40
Answer: B
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Page 5
Chapter 4: Conventional Solutions to Environmental
Problems: Command-And-Control Approach
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40 Verified Questions
40 Flashcards
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Sample Questions
Q1) Hypothetically, suppose a recent study of hazardous waste abatement (A) arrives at the following national estimates for abating chemical solvents: MSB = 100 - 0.75A and MSC = 20 + 0.50A, where A is measured in millions of tons per year, and costs are measured in millions of dollars.
a. Based on this information, what would be the national standard for an allocatively efficient abatement?
b. Under what conditions would this level be efficient at the regional level?
c. If instead the government set the abatement standard at 50 million tons per year, would that standard be too lenient or too restrictive at the national level? Support your answer with specific values.
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) Standards are the fundamental basis of most environmental policies.
A)True
B)False
Page 6
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Chapter 5: Economic Solutions to Environmental Problems: the Market Approach
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40 Verified Questions
40 Flashcards
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Sample Questions
Q1) A subsidy
A) used in an abatement equipment market can achieve an efficient solution if the subsidy is set equal to the MEB at Q<sub>E</sub>
B) on pollution reduction activity encourages firms to reduce pollution below a predetermined standard
C) on abatement equipment can create bias by changing the relative prices of various abatement technologies
D) all of the above
E) (a) and (b) only
Q2) Suppose that for some abatement equipment market, the MSB = 502 - 1.2Q, and MPB = 302 - 0.8Q, then the Pigouvian subsidy must equal 804 - 2Q at the efficient output level to achieve the efficient output level.
A)True
B)False
Q3) In a deposit-refund system, the deposit makes the polluter internalize the externality by absorbing the cost of any damage it might generate in advance.
A)True
B)False
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Chapter 6: Environmental Risk Analysis
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51 Verified Questions
51 Flashcards
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Sample Questions
Q1) The only level of "acceptable" risk to society is a risk level of zero.
A)True
B)False
Q2) Risk assessment involves
A) balancing the costs and benefits of environmental hazards.
B) an evaluation of the risk caused by exposure to an environmental hazard
C) minimizing the costs of meeting an environmental objective
D) eliminating all environmental risks
E) none of the above
Q3) Risk-benefit analysis and benefit-cost analysis are examples of risk management strategies.
A)True
B)False
Q4) In the United States, all environmental laws set environmental risk at a level where the MSB equals the MSC.
A)True
B)False
Q5) Risk that is deliberately assumed is considered involuntary risk.
A)True
B)False
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Chapter 7: Assessing Benefits for Environmental Decision Making
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41 Verified Questions
41 Flashcards
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Sample Questions
Q1) In modeling the travel cost method, the estimated benefit of improving the environmental quality of a natural resource is captured by the change in consumer surplus associated with a decrease in demand for that resource
A)True
B)False
Q2) Installing an air purifier or a water filtration system is an example of a(n)
A) direct estimation method
B) ozone-reducing policy
C) physical linkage approach
D) averting action
Q3) In theory, the concept of incremental benefits refers to the change in MSB of environmental quality from a pre-policy level to a post-policy level.
A)True
B)False
Q4) The change in health, ecological, and property damages linked to environmental policy is known as incremental benefits.
A)True
B)False
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Chapter 8: Assessing Costs for Environmental Decision Making
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40 Verified Questions
40 Flashcards
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Sample Questions
Q1) The value of reduced product variety due to an environmental policy initiative or regulation is an example of an implicit cost.
A)True
B)False
Q2) 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
Q3) Marginal social cost (MSC) of some abatement level, A<sub>1</sub>, can be determined as the area under the total social cost (TSC) function up to A<sub>1</sub>.
A)True
B)False
Q4) An advantage of the survey approach is that the estimates are derived from external experts.
A)True
B)False
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Chapter 9: Benefit-Cost Analysis in Environmental Decision Making
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37 Verified Questions
37 Flashcards
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Sample Questions
Q1) President Reagan was the only U.S. president to support the use of economic criteria in policy decision making.
A)True
B)False
Q2) The present value of benefits (PVB) is found as A) the discounted value of benefits for a single period without adjusting for inflation B) (b<sub>t</sub>/[1+r<sub>s</sub>]<sup>t</sup>), with b<sub>t</sub><sub> </sub>= B<sub>t</sub>/(1 + p)<sup>t</sup>
C) (b<sub>t</sub>/[1-r<sub>s</sub>]<sup>t</sup>), with b<sub>t</sub><sub> </sub>= B<sub>t</sub>/(1 + p)<sup>t</sup>
D) (b<sub>t</sub>/[1+r<sub>s</sub>]<sup>t</sup>), with b<sub>t</sub><sub> </sub>= B<sub>t</sub>/(1 - p)<sup>t</sup>
Q3) Selecting the social discount rate is among the issues debated in the use of benefit-cost analysis for public policy evaluation.
A)True
B)False
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11
Chapter 10: Defining Air Quality: the Standard-Setting Process
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48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/73560
Sample Questions
Q1) Because the NAAQS are nationally-based and uniform, they necessarily achieve an efficient result at the regional level.
A)True
B)False
Q2) One of the hallmarks of the 1990 Clean Air Act Amendments is its integration of market-based policy instruments, such as the use of tradeable allowances to control emissions.
A)True B)False
Q3) In the United States, seven criteria pollutants have been identified through criteria documents.
A)True B)False
Q4) In the United States, the National Emission Standards for Hazardous Air Pollutants (NESHAP) are set to reach the maximum reduction of each toxic achievable, which is known as the maximum achievable control technology (MACT).
A)True B)False
Page 12
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Chapter 11: Improving Air Quality: Controlling Mobile
Sources
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37 Verified Questions
37 Flashcards
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Sample Questions
Q1) Photochemical smog is caused by a chemical reaction involving criteria pollutants in the presence of sunlight.
A)True
B)False
Q2) Uniform standards
A) are not relevant to mobile source controls
B) refer to standards that remain the same over time
C) have been shown to be more costly than a two-tiered standard on motor vehicles
D) achieve an allocatively efficient outcome
Q3) According to the textbook application, China's demand for automobiles
A) is linked in part to the nation's rising income and economic prosperity
B) is limited because of the absence of automobile plants in China
C) has declined because of the migration of people from urban to rural areas
D) has grown slowly over the past several years
Q4) Plug-in hybrids and hybrid vehicles are examples of partial zero-emission vehicles (PZEVs).
A)True
B)False
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Chapter 12: Improving Air Quality: Controlling Stationary
Sources
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47 Verified Questions
47 Flashcards
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Sample Questions
Q1) The GHG permitting requirements
A) are applicable to both mobile and stationary sources
B) will not be in force until 2016
C) are part of the New Source Review requirements
D) all of the above
Q2) The uniformity of technology-based standards is the characteristic that allows them to achieve cost-effectiveness.
A)True
B)False
Q3) In an allowance market, buyers will purchase allowances as long as the price is higher than their MAC, which results in a cost-effective solution.
A)True
B)False
Q4) Under the cap-and-trade program established under Title IV of the Clean Air Act Amendments of 1990, a permanent annual cap for SO<sub>2</sub> was set and tradeable SO<sub>2</sub> allowances were issued to stationary sources.
A)True
B)False
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Chapter 13: Global Air Quality: Policies for Ozone Depletion and Climate Change
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) 1.Algebraically solve for the efficient equilibrium price and quantity, P<sub>E</sub> and Q<sub>E</sub>.
2. Find the dollar value of a per unit gasoline tax that would achieve the efficient solution, and calculate the resulting tax revenues generated to government.
Q2) CFC allowance trading was an integral part of achieving the objectives of the Montreal Protocol.
A)True
B)False
Q3) Currently, which of the following countries have not ratified the Kyoto Protocol?
A) United States
B) China
C) Russia
D) all of the above
E) (a) and (b) only
Q4) The U.S. federal government has enacted a nationwide carbon tax to reduce carbon dioxide emissions.
A)True
B)False
Page 15
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Chapter 14: Defining Water Quality: the Standard-Setting Process
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43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/73564
Sample Questions
Q1) According to the textbook application, the largest oil tanker spill in history A) occurred when two tankers collided in 1979 off the coast of Trinidad and Tobago B) involved the Exxon Valdez in 1989 C) was associated with the Hebei Spirit in 2007 D) occurred as the result of an explosion of a deepwater oil rig
Q2) The two major sources of water contamination are typically classified as mobile and stationary sources.
A)True
B)False
Q3) Suppose that the benefits and costs of water quality policy have been estimated as follows:
MSB = 40 - 0.8A MSC = 10 + 0.2A TSB = 40A - 0.4A<sup>2</sup> TSC = 10A + 0.1A<sup>2</sup>, where A is the percentage of pollution abatement and the benefits and costs are measured in thousands of dollars.
a. Determine the range of abatement within which policy achieves positive net benefits.
b. Find the efficient level of abatement.
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Page 16
Chapter 15: Improving Water Quality: Controlling Point and Nonpoint
Sources
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51 Verified Questions
51 Flashcards
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Sample Questions
Q1) In order for the effluent limitations to achieve cost-effectiveness, the MACs of all polluters would have to be equal.
A)True
B)False
Q2) The presidential Executive Order that is dedicated to the restoration of the Chesapeake Bay proposes a strictly command-and-control approach to restore and protect this natural resource.
A)True
B)False
Q3) Ultimately, federal subsidies of POTW construction accomplished little in terms of improving waste treatment for the U.S. population.
A)True
B)False
Q4) All point sources are subject to effluent limitations, which are imposed uniformly within each designated group.
A)True
B)False
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Chapter 16: Protecting Safe Drinking Water
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39 Verified Questions
39 Flashcards
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Sample Questions
Q1) The EPA under the Obama administration devised a Drinking Water Strategy with goals that include addressing contaminants as groups instead of one at a time.
A)True B)False
Q2) The most common pricing structure used for drinking water in the United States is the increasing block rate structure.
A)True B)False
Q3) Standard setting under the Safe Drinking Water Act Amendments of 1996 ignores benefit-cost analysis.
A)True
B)False
Q4) In the United States, the first law dealing with drinking water was passed in the 1920s. A)True B)False
Q5) The first Safe Drinking Water Act (SDWA) was passed in the 1970s. A)True B)False
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Chapter 17: Managing Hazardous Solid Waste and Waste Sites
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43 Verified Questions
43 Flashcards
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Sample Questions
Q1) Identification of hazardous wastes under the law relies on risk-benefit analysis.
A)True
B)False
Q2) 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
Q3) A permit system is used to control hazardous waste management at treatment, storage, and disposal facilities (TSDFs).
A)True
B)False
Q4) The economic sector responsible for the largest amount of hazardous waste is A) households
B) industry
C) government
D) institutions
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Page 19
Chapter 18: Managing Municipal Solid Waste
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Sample Questions
Q1) In terms of nonhazardous waste, the federal government is responsible for A) every aspect of nonhazardous waste management
B) setting recycling rates for each state
C) establishing markets for recovered MSW
D) setting minimum criteria for sanitary landfills and other land disposal sites
Q2) One of the fastest growing segments of the MSW stream is plastics.
A)True
B)False
Q3) The dollar value of a retail (or front-end) disposal charge needed to restore efficiency to this market would be
A) $4
B) $2
C) $6
D) $20
Q4) Assuming that Houston uses a flat fee pricing system for trash services, the equilibrium quantity of MSW services provided is
A) 12
B) 1.2
C) 0
D) 3
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Chapter 19: Controlling Pesticides and Toxic Chemicals
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35 Verified Questions
35 Flashcards
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Sample Questions
Q1) All of the following statements about the Toxic Substances Control Act (TSCA) are correct EXCEPT
A) TSCA was enacted in the 1970s.
B) One of TSCA's primary objectives is to control chemicals that pose a risk after they are introduced into commerce.
C) TSCA is the legislation that governs U.S. chemical policy today.
D) TSCA grants EPA the authority to require testing on existing chemicals and to review most newly introduced chemicals before introduced to commerce.
Q2) Risk-benefit analysis of chemicals is difficult because
A) there is a void in formal assessments of health and ecological risks
B) perception of risk of chemical exposure is not always aligned with actual risk
C) the estimation of social benefits is particularly daunting
D) U.S. policy on toxic chemicals is not as well established as it is for policy on air and water quality
E) all of the above
Q3) The first TSCA inventory was published in the 1970s.
A)True
B)False
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21
Chapter 20: Sustainable Development: International
Environmental Agreements and International Trade
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33 Verified Questions
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Sample Questions
Q1) The protectionist view
A) argues that nations should protect their borders from transboundary pollution
B) believes that trade can create unfair competition or lose jobs to other nations
C) supports environmental policy only if it protects domestic jobs
D) ignores environmental issues, focusing only on the effects of trade on competition and employment
Q2) The World Trade Organization (WTO)
A) is the successor to GATT
B) administers trade agreements and resolves trade disputes
C) comprises more than 150 member nations
D) all of the above
E) (a) and (b) only
Q3) The shape of the Environmental Kuznets Curve reflects the theory that advanced levels of industrial development are linked to higher levels of pollution.
A)True
B)False
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Chapter 21: Sustainable Approaches: Industrial Ecology and
Pollution Prevention
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30 Verified Questions
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Sample Questions
Q1) Residuals are quantities of pollutants left in the environment after some natural or technological process has occurred.
A)True
B)False
Q2) According to the textbook application, industrial symbiosis in Kalundborg, Denmark A) is based on the development of an industrial ecosystem B) involves one private firm and one municipality C) relies on incineration to succeed D) represents a linear flow of materials
Q3) In the hierarchy of waste management identified by the Pollution Prevention Act of 1990, recycling of wastes is the top priority.
A)True
B)False
Q4) An important motivation of environmental accounting is to help firms make accurate costs assessments about pollution prevention.
A)True
B)False
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