Amber Econ Quizzes Chapters 1-4 PDF

Chapter 01 Quiz: 1. Concern for managing natural resources to ensure their quality and abundance for future generations is called sustainable development: a. True b. False 2. The warmer temperatures in the Gulf of Mexico may have increased the magnitude and exte...

Chapter 01 Quiz: 1. Concern for managing natural resources to ensure their quality and abundance for future generations is called sustainable development: a. True b. False 2. The warmer temperatures in the Gulf of Mexico may have increased the magnitude and extent of the damages linked to the Gulf oil spill in 2010: a. True b. False 3. Which of the following processes does NOT help with the flow of residuals back to nature? a. Recovery b. Recycling c. Reuse d. Retention 4. Runoff from urban streets is an example of nonpoint source pollution: a. True b. False 5. According to the second law of thermodynamics a. matter and energy can be neither created nor destroyed b. nature’s capacity to convert matter and energy is limited c. nothing is lost in the conversion of materials from economic activity into other forms of matter and energy d. all of the above e. none of the above Chapter 02 Quiz: 1. Suppose that in the market for bottled water, the market supply is QS = 14 + 20P and the market demand is QD = 74 – 10P, then equilibrium price is a. $2 b. $54 c. $6 d. none of the above 2. The triangular area under a linear demand curve an above the effective price is called a. producer surplus. b. consumer surplus. c. government surplus. d. quantity of surplus. 3. The demand faced by the perfectly competitive firm is perfectly elastic, meaning that price and marginal revenue are equal. a. True b. False 4. Suppose the supply and demand curves for oil are specified given by the following set of equations, where QS is quantity supplied, Qd is quantity demanded, and P is the price of a barrel of oil. QS = 25 + 10 P QD = 925 – 5P When the price of shoes is $90, the amount of _______ will be _____ pairs of shoes. a. Surplus, 450 b. Shortage, 450 c. Surplus, 925 d. Shortage, 925 5. If a perfectly competitive firm is a profit-maximizer, it produces where a. MR > MC b. P > MR c. P = MC d. TR = TC Chapter 03 Quiz Attempt 1: 1. If we define the relevant market as “environmental quality,” then the market failure is due to the presence of a negative externality a. True b. False 2. The Coase Theorem assumes a. transactions are costless b. damages are accessible and measurable c. both (a) and (b) d. none of the above 3. If MSC = 40.0 + 0.25Q, and MPC = 40.0 + 0.14Q, then production is associated with an externality specified as MEC = 40.0 + 0.36Q. a. True b. False 4. If the third-party effects of a good generate benefits to a third party, it is a positive externality. a. True b. False 5. If property rights for resources are shared, those resources are called common property resources. a. True b. False Chapter 03 Quiz Attempt 2: 1. Environmental pollution can be characterized as a market failure that distorts the classical market outcome. a. True b. False 2. If property rights for resources are shared, those resources are called common property resources. a. True b. False 3. A public good is characterized as possessing either nonrivalry in consumption or nonexcludable benefits. You Answered a. True b. False 4. 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 5. If property rights are held by the producer of an externality-generating good, then bargaining will continue as long as MEC > ñ > Mð, where ñ represents the payment offered to the producer not to pollute. a. True b. False Chapter 03 Quiz Attempt 3: Question 1 If it is not possible to prevent others from sharing in the benefits of a good's consumption, we say that the good: a. is an economic bad b. is nonrival in consumption c. has the characteristic of nonexcludability (Correct) d. is a private good Question 2 Consider the following model for the production of refined oil: MSC = 10 + 0.5Q MEC = 0.3Q MSB = 30 – 0.3Q MEB = 0 According to these relationships, the efficient output level arises where: a. QE = 25 (Correct) b. QE = 40 c. QE = 20 d. none of the above Question 3 Consider the table showing demand (maximum willingness to pay) and the marginal cost (MC) of producing a product. Based on this data, and in the absence of any externality, the socially efficient price for this product is equal to: a. 110 units b. 160 units c. 210 d. $240 (Correct)  Question 4 In the given figure: Consider the above figure which MC1 is the private marginal cost of producing refined oil and MC2 is the marginal social cost producing refined oil. If Q* units of refined oil is being produced, the TOTAL private cost of producing refined oil is the area: MC1 = Private marginal cost of producing refined oil MC2 = Marginal social cost of producing refined oil If Q* units of refined oil are being produced, the TOTAL private cost of producing refined oil is the area: a. A (Correct) b. B c. C d. B + C e. A + B Question 5 In the presence of a negative externality: a. There is an overallocation of resources to production b. The competitive equilibrium will not achieve an allocatively efficient solution c. MSC exceeds MSB at the competitive output level d. All of the above (Correct) e. (a) and (b) only Chapter 04 Quiz Attempt 1: Question 1 According to the cost-effectiveness criterion, all polluting sources would abate pollution up to the point where their individual abatement levels were equal. a. True b. False (Correct) Question 2 Suppose that two firms, X and Y, face the following abatement costs: MACX = 1.2AX MACY = 0.3AY TACX = 0.6AX² TACY = 0.15AY² Further assume that the combined abatement standard is 40 units for both firms. According to this model, if the government uses a uniform standard: a. Firm Y would face a marginal abatement cost that is higher than that for firm X b. That standard would achieve a cost-effective solution c. Firm Y should do more of the abating and firm X should do less to move closer to a cost-effective solution (Correct) d. Firm X’s marginal abatement cost would be $48, and firm Y’s marginal abatement cost would be $12 Question 3 Based on the criteria of allocative efficiency, an abatement standard is set optimally if: a. That standard is benefit-based b. It is set where the MSB of abatement is equal to (MACmkt + MCE) (Correct) c. The least amount of resources is used to achieve the standard d. It is set at the point where MSB of abatement equals zero Question 4 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 (Correct Answer) Question 5 The government standard that stipulates the type of abatement control that must be used by all regulated polluting sources is/are: a. Ambient standards b. Technology-based standards (Correct) c. Performance-based standards d. a and b above Attempt 2: Question 1 Suppose that two firms, X and Y, face the following abatement costs: MACX = 1.2AX MACY = 0.3AY TACX = 0.6AX² TACY = 0.15AY² Further assume that the combined abatement standard is 40 units for both firms. Based on this model, if the government uses a uniform standard: a. The total abatement cost for firm X is $24 b. The total abatement cost for firm Y is $12 c. The combined total abatement cost for both firms is $1,200 d. The combined total abatement cost for both firms is $300 (Correct) Question 2 The sum of all polluters’ MACs equals the marginal social cost (MSC) of abatement. a. True b. False (Correct) Question 3 Much of the air pollution in Catano, Puerto Rico was linked to a nearby oil refinery. a. False (Correct Answer) b. True Question 4 Polluter 1’s Marginal Abatement Cost (MAC1): MAC1 = 5A1 Polluter 1’s Total Abatement Costs (TAC1): TAC1 = 2.5(A1)² Polluter 2’s Marginal Abatement Cost (MAC2): MAC2 = 1.25A2 Polluter 2’s Total Abatement Costs (TAC2): TAC2 = 0.625(A2)² Consider the above information. The government has assigned a uniform abatement standard of A1 = A2 = 10. If the polluters accept the government mandate, the marginal cost of abatement to polluter 1 will be: a. $50 (Correct Answer) b. $12.50 c. $62.50 d. $20 Question 5 The marginal cost of enforcement (MCE) must be added vertically to the MACmkt to derive the marginal social cost (MSC) of abatement function. a. True (Correct) b. False Attempt 3: Question 1 According to the cost-effectiveness criterion, all polluting sources would abate pollution up to the point where their individual abatement levels were equal. a. True b. False (Correct) Question 2 Suppose that two firms, X and Y, face the following abatement costs: MACX = 1.2AX MACY = 0.3AY TACX = 0.6AX² TACY = 0.15AY² Further assume that the combined abatement standard is 40 units for both firms. According to this model, if the government uses a uniform standard: a. Firm Y would face a marginal abatement cost that is higher than that for firm X b. That standard would achieve a cost-effective solution c. Firm Y should do more of the abating and firm X should do less to move closer to a cost-effective solution (Correct) d. Firm X’s marginal abatement cost would be $48, and firm Y’s marginal abatement cost would be $12 Question 3 Based on the criteria of allocative efficiency, an abatement standard is set optimally if: a. That standard is benefit-based b. It is set where the MSB of abatement is equal to (MACmkt + MCE) (Correct) c. The least amount of resources is used to achieve the standard d. It is set at the point where MSB of abatement equals zero Question 4 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 (Correct Answer) Question 5 The government standard that stipulates the type of abatement control that must be used by all regulated polluting sources is/are: a. Ambient standards b. Technology-based standards (Correct) c. Performance-based standards d. a and b above