Midterm EC3545 Spring, 1996
True False (assume question relates to U.S., unless indicated otherwise; 1 pt each; NOTE: if any part of the question is false, the entire question is false)
1. Technological advance generally results in less pollution per unit of output.
2. Materials extracted from the environment do not simply disappear when they are consumed.
3. From the perspective of economists, emissions are to be controlled independently of their impact on environmental quality and regardless of whether human externalities result.
4. Most rich (high GNP) countries have higher quality environments than do poor (low GNP) countries, despite the former's greater total production.
5. TSP and SOx come predominantly from combustion of fossil fuels in the power generation and industrial sectors of the economy.
6. Among the commonly monitored pollutants, TSP and SOx are of more concern, from a health perspective than are hydrocarbons (HC) and ozone.
7. Atmospheric levels of SOx and TSP are higher now than they were in the 1960s.
8. In terms of tonnage of emissions into the air, electric power plants are now responsible for more pollution than the transportation sector and industrial sources combined.
9. CO and HC emissions have been increasing, while NOx has decreased markedly during the 1980s.
10. The most common measure of water quality relates to its salinity.
11. Water is "murkier" in acid-rain-polluted lakes than in lakes with a normal pH.
12. Trends in both air and water quality are mixed, with virtually some measures showing deterioration while others show improvements over recent decades.
13. At the economist's social optimum (when externalities are internalized), one would generally not expect to observe continued environmental damages.
14. At the economist's optimal environmental quality, marginal benefits equal marginal costs of clean-up.
15. Environmental trade-offs (costs and benefits), while inevitable, should not be considered--from the perspective of efficiency--since efficiency deals with what is proper moral behavior.
16. While there are many positive and negative features of voting as a means of deciding public issues, one undesirable feature of voting is that it does not allow those with very large environmental demands to express them at the expense of the majority.
17. There is far less water available in surface reservoirs than in aquifers lying beneath the surface of the earth.
18. It was argued in class that non-point discharges were relatively under-controlled as compared to point sources of water pollution.
19. Economics is the science that deals systematically with human wants, and since humans want more environmental quality, they can and should be able to have it without having to sacrifice ordinary goods.
20. Graves argued in class that "rationality," comparing the advantages with the disadvantages of alternative courses of action and choosing actions with the highest net advantage, is the approach generally recommended by economists for determining relative amounts of environmental and ordinary goods.
21. It was argued in class that inefficient actions are sometimes undertaken, because of their equity impact.
22. The environmental policy emphasis on uniform nationwide standards was argued to be appropriate, since the nature of most pollution is such that damages do not vary importantly according to where and when pollution occurs.
23. "Public goods" are goods, like school lunches, that are provided by federal, state, or local governments.
24. Optimal environmental controls cause the prices of many goods to increase, but they still must make us collectively "better off."
25. If our primary concern is economic efficiency, we should always
recycle everything we can.
SHORT Answer essays: (five points each; answer 8 of 10)
1. A somewhat lengthy class discussion focussed on consumer boycotts
of ivory, rhino tusks, and the like. Economists generally conclude that
whether such bans are good or bad (in terms of saving species from extinction)
depends on one critical condition--when would an ivory ban be "good?;"
and under what circumstances would it be "bad?"
2. As one nears the socially optimal quantity of a public good, would
you expect increasing or decreasing agreement in the population about policies
that are a bit more or less stringent, and why?
3. Define an "externality" and give examples of both positive and negative
externalities.
4. List accurately the five elements of an interdisciplinary environmental
analysis (i.e. the five boxes, described enough to reveal that you know
what goes on in each).
5. In class it was argued that air and water pollution, endangered species,
rainforest destruction, the "freshman 10," cutting across the grass on
C.U.'s campus, and so on are
fundamentally similar--why do households
and firms behave "inappropriately?"
6. Assume that Boulder has developed an innovative transportation system
that is good for both households and firms. What do you expect will happen
to equilibrium wages and rents in Boulder, and why?
7. "Environmental policy as practiced in this country has favored those
with below average incomes." (True, False, or Uncertain--explain your answer).
8. What is the difference between "Pareto efficiency" and "Kaldor efficiency"--why
is the difference so critical to knowing whether a public policy (say,
environmental policy) is desirable or undesirable?
9. Over the last couple of hundred years, both population and income
have risen dramatically in much of the world. Why would a Doomster think
this might have made (and continue to make) us "worse off?" Why might a
Boomster disagree? Is there any sense in which they can
both be
correct? (HINT--we are definitely getting "differently off" over time)
10. How does the economist incorporate notions of "morality" into environmental
decision-making? (HINT: what would happen--that economists care a lot about--if
people became more moral about the environment; a parallel with organized
religion might be helpful)