Midterm EC3545 Spring, 1997
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 is the principal cause of environmental problems, since new technologies are generally dirtier than those they replace.
2. Materials used in ordinary production processes are not a concern, since any residuals can readily be converted into energy according to the familiar equation E=MC2.
3. From the perspective of a typical environmentalist, it could be desirable to control emissions even when transactions giving rise to them (e.g. steel production) do not involve externalities. (HINT: What are "externalities?")
4. The amount of pollution per unit of GNP tends to get smaller the higher is GNP.
5. TSP and SOx are of concern primarily because they interact in the presence of sunlight to produce ozone.
6. Ozone at ground level (e.g. in Los Angeles) is beneficial since it filters out ultraviolet radiation--hence the banning of CFCs in refrigeration units in this country.
7. Atmospheric levels of CO2 are higher now than they were in the 1960s.
8. Walking through Grand Central Station in New York City exposes you to more radiation than you would be exposed to walking the same distance around a nuclear power plant.
9. CO and HC emissions have recently decreased, while NOx has increased.
10. The most common measure of emissions into water is BOD.
11. Water in acid-rain-polluted lakes may have a pH as high as 9.5, as compared to rain water with a pH of 7.5.
12. In terms of actual trends in both air and water quality, the doomsters appear to be correct over recent decades, since growth in income and population have resulted in ever dirtier air and water in the U.S.
13. At the economist's social optimum (when externalities are internalized), one would generally continue to observe some environmental damages.
14. At the economist's optimal environmental quality, the marginal health benefits of clean-up would equal the marginal costs of clean-up.
15. Environmental trade-offs (costs and benefits) are not inevitable, since we normally have more of everything than we want in any event.
16. While there are many positive and negative features of voting as a means of deciding public issues, one desirable feature of voting is that it does allow a minority of people with very large, real environmental demands to obtain the environmental goods they desire.
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 emphasizes that greater environmental quality can generally be obtained only by giving up other goods that we also care about.
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. The environmental policy emphasis on uniform nationwide standards (unvarying over time or space) was argued in class to be inappropriate, since the nature of most pollution is such that damages vary importantly according to where and when pollution occurs (despite any regional or global damages that might additionally exist).
22. "Public goods" are goods, like school lunches, that are provided by federal, state, or local governments.
23. Optimal environmental controls cause the prices of many goods to increase, but they still must make us collectively "better off."
24. If our primary concern is economic efficiency, we should always recycle everything we can.
Make up your own T-F question below (you will get a point, and, if it's good it may appear on the final):
25.
SHORT Answer essays: (five points each; answer 8 of 10)
1. Why were some countries in Africa (S. Africa, Botswana, et. al.)
unwilling to sign the CITES treaty which encouraged banning the sales of
ivory? Do they dislike their elephants? Under what conditions would you
be for and against an ivory ban at the consumer level?
2. In class, the role of "perceptions" was discussed extensively. What
approach to environmental benefit estimation would you recommend if benefits
are perfectly perceived (and why)? What approach would you recommend
if the impact of environmental quality on peoples' utility were not perceived
at
all (and why)?
3. Define a "public good" and give an example of one; also give an example
of an ordinary private good, contrasting the important differences (HINT:
expand on your definition of the public good to show how the private good
is different).
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. Relative to wages and rents in some completely average city, what would you expect wages and rents to be (higher or lower, respectively) in each of the following types of cities:
a) a city nice for consumers and average for firms
b) a city nice for firms and average for consumers
c) a city nice for both firms and consumers
d) a city nice for consumers but bad for firms
e) a city nice for firms but bad for consumers
7. Some people (e.g. Julian Simon, the late Herman Kahn and other boomsters)
think "we" are getting better off over time. Others (e.g. Paul Ehrlich,
Meadows and other doomsters) think "we" are getting worse off over time.
It is, of course, possible that both groups are correct, depending on preferences
for specific goods by particular people. Consider, however, a "representative"
person--what general considerations would guide your thinking about whether
such a person is getting better off or worse off over time (HINT: first
define what you mean by "better" or "worse" off).
8. Why do environmental problems (e.g. air pollution, endangered species,
etc.) tend to occur in public good media? (HINT: "your" air, a public good,
is more likely to be polluted than is "your" land--why?)
9. Economists in their role as economists can discuss the benefits and
costs of various policies (and to whom those benefits and costs accrue)--but
does even a perfectly accurate assessment of these benefits and
costs (and their distribution) allow economists to say we should
or should not adopt a particular policy? Discuss.
10. Write a question of your own choosing that I have not yet asked--perhaps
one you were hoping I would ask. Answer it (remember that the harder the
question, the less "good" the answer has to be and conversely).