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Quiz 3 Chapter 4 and 5
Chapter 04
Pollution
Problems: Must
We Foul Our Own Nests?
Multiple Choice Questions
1. Pollution
A. Like Air And Water Pollution Became An Issue In The U.S. During The 1960's
B. Tends To Be Worse In More Populated Than In Less Populated Areas
C. Occurs Because Large Portions Of The Environment Are Owned By Polluters
D. Increases The Cost Of Producing All Goods
E. Issues Are Represented In All Of The Above Answers
A. Like Air And Water Pollution Became An Issue In The U.S. During The 1960's
B. Tends To Be Worse In More Populated Than In Less Populated Areas
C. Occurs Because Large Portions Of The Environment Are Owned By Polluters
D. Increases The Cost Of Producing All Goods
E. Issues Are Represented In All Of The Above Answers
2. The Level Of Pollution Increases When
A. A Person Breathes
B. Wastes Are Dumped Into The Environment
C. Wastes Are Dumped Into The Environment At A Higher Rate Than Wastes Are Recycled
D. New Industrial Plant Opens
E. Recycling Increases
A. A Person Breathes
B. Wastes Are Dumped Into The Environment
C. Wastes Are Dumped Into The Environment At A Higher Rate Than Wastes Are Recycled
D. New Industrial Plant Opens
E. Recycling Increases
3. Which Of The Following Is A Service Provided By The
Environment?
A. Use As A Habitat
B. Provision Of Amenities
C. Provision Of Raw Materials
D. Waste Disposal
E. All Of The Above
A. Use As A Habitat
B. Provision Of Amenities
C. Provision Of Raw Materials
D. Waste Disposal
E. All Of The Above
4. Which Of The Following Best Describes Why Pollution Exists
In The Environment?
A. The Environment Has No Capacity To Recycle Waste
B. All Materials Take A Very Long Time To Recycle In The Environment
C. No Waste Can Be Completely Recycled
D. Recycling Processes Fail To Prevent Wastes From Accumulating In The Environment
E. The Environment's Capacity To Recycle Exceeds The Rate Of Waste Disposal
A. The Environment Has No Capacity To Recycle Waste
B. All Materials Take A Very Long Time To Recycle In The Environment
C. No Waste Can Be Completely Recycled
D. Recycling Processes Fail To Prevent Wastes From Accumulating In The Environment
E. The Environment's Capacity To Recycle Exceeds The Rate Of Waste Disposal
5. Human Production Processes Do Not Include Which Of The
Following Services?
A. Mineral Deposits, Such As Coal And Iron
B. Renewable Resources, Like Timber And Plant Products
C. Technological Advances In Production
D. Recycling Of Waste Materials, Such As Chemical Wastes
E. All Of The Above
A. Mineral Deposits, Such As Coal And Iron
B. Renewable Resources, Like Timber And Plant Products
C. Technological Advances In Production
D. Recycling Of Waste Materials, Such As Chemical Wastes
E. All Of The Above
6. Marginal Private Cost (Mpc) Always Includes:
A. The Price Of A Good In The Market
B. The Extra Costs Of Production Of One More Unit Of A Good
C. The Additional Benefits Received By Consumers From The Consumption Of The Good
D. The Costs Imposed On Society From Pollution
E. The Expenditures By Government To Control Negative Externalities
A. The Price Of A Good In The Market
B. The Extra Costs Of Production Of One More Unit Of A Good
C. The Additional Benefits Received By Consumers From The Consumption Of The Good
D. The Costs Imposed On Society From Pollution
E. The Expenditures By Government To Control Negative Externalities
7. The Term "Marginal Social Benefit" Means
A. Benefits That Are Just Above The Margin Of Being Zero
B. The Entire Benefits Obtainable From The Activity
C. That Part Of The Benefits Covered By The Costs Of Carrying On The Activity
D. The Change In Total Social Benefits Per Unit Change In The Amount Of The Activity
E. The Benefits Of Minimal Quality Goods And Services
A. Benefits That Are Just Above The Margin Of Being Zero
B. The Entire Benefits Obtainable From The Activity
C. That Part Of The Benefits Covered By The Costs Of Carrying On The Activity
D. The Change In Total Social Benefits Per Unit Change In The Amount Of The Activity
E. The Benefits Of Minimal Quality Goods And Services
8. If All Benefits From Consuming A Good Go To Consumers, The
Demand Curve Is The Same As The
A. Mpc Curve
B. Msc Curve
C. Mpb Curve
D. Supply Curve
E. Benefit Curve
A. Mpc Curve
B. Msc Curve
C. Mpb Curve
D. Supply Curve
E. Benefit Curve
9. When There Are No Externalities, Equilibrium In A
Market
A. Maximizes Social Well-Being
B. Equates Quantity Supplied And Quantity Demanded
C. Equates Msb And Msc
D. Equates Mpb And Mpc
E. Does All Of The Above
A. Maximizes Social Well-Being
B. Equates Quantity Supplied And Quantity Demanded
C. Equates Msb And Msc
D. Equates Mpb And Mpc
E. Does All Of The Above
10. When The Cost Of An Action Falls On Other Than The Person
(Or Persons) Responsible For The Action, Which Of The Following Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
11. When A Benefit Of An Action Falls On Other Than The
Person (Or Persons) Responsible For The Action, Which Of The Following
Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
12. When The Marginal Private Benefit Of An Activity Does Not
Equal The Marginal Social Benefit, Which Of The Following Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
13. When The Marginal Private Cost Of An Activity Does Not
Equal The Marginal Social Cost, Which Of The Following Exists?
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
A. Positive Externality
B. Negative Externality
C. Externality In Consumption
D. Externality In Production
E. External Cost
14. Which Of The Following Creates A Positive Externality In
Consumption?
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining
15. Which Of The Following Creates A Positive Externality In
Production?
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining
16. Which Of The Following Creates A Negative Externality In
Consumption?
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining
A. Polluting A River
B. Playing Loud Music
C. Vaccinations
D. Reducing The Cost Of Producing Of Another Good
E. Strip Mining
17. People Have An Incentive To Pollute When
A. There Is Collective Consumption Of An Environmental Service
B. No One Has Property Rights To The Environment
C. It Is Less Expensive To Pollute Than To Clean Up
D. The Mpc Of Polluting < Mpc Of Cleanup
E. All Of The Above
A. There Is Collective Consumption Of An Environmental Service
B. No One Has Property Rights To The Environment
C. It Is Less Expensive To Pollute Than To Clean Up
D. The Mpc Of Polluting < Mpc Of Cleanup
E. All Of The Above
18. As Additional Units Of Pollution Control Are Added, At
Some Point Each Additional Unit Adds
A. Less Than The Previous Unit To Total Benefits
B. More Than The Previous Unit To Total Benefits
C. Less Than The Previous Unit To Total Costs
D. More To Total Benefits Than To Total Costs
E. Less To Total Costs Than Total Benefits
A. Less Than The Previous Unit To Total Benefits
B. More Than The Previous Unit To Total Benefits
C. Less Than The Previous Unit To Total Costs
D. More To Total Benefits Than To Total Costs
E. Less To Total Costs Than Total Benefits
19. When Mpc Is Less Than Msc,
A. Firms Will Tend To Produce More Than Is Socially Optimal
B. The Price Of The Product Will Be Higher Than The Competitive Price
C. The Firm Must Be A Monopolist
D. The Firm Will Produce Less Than Is Socially Optimal
E. There Are Positive Externalities In Production
A. Firms Will Tend To Produce More Than Is Socially Optimal
B. The Price Of The Product Will Be Higher Than The Competitive Price
C. The Firm Must Be A Monopolist
D. The Firm Will Produce Less Than Is Socially Optimal
E. There Are Positive Externalities In Production
20. Complete Elimination Of Pollution Is Economically
Rational When
A. Pollution Is Associated With Illness In Humans
B. For Each Unit Of Pollution, The Cost Of Clean-Up Is Less Than The Benefit From Its Elimination
C. The Pollution Will Likely Affect Future Generations
D. Msc Of Cleanup < Msb Of Cleanup
E. None Of The Above; Complete Elimination Is Never Rational
A. Pollution Is Associated With Illness In Humans
B. For Each Unit Of Pollution, The Cost Of Clean-Up Is Less Than The Benefit From Its Elimination
C. The Pollution Will Likely Affect Future Generations
D. Msc Of Cleanup < Msb Of Cleanup
E. None Of The Above; Complete Elimination Is Never Rational
21. Pollution Should Be Completely Eliminated
A. When The Marginal Social Benefit Of Control Is Greater Than Or Equal To The Marginal Social Cost Of Control For All Units Of Pollution
B. When The Marginal Social Cost Of Control Is Zero
C. At No Time, From An Economic Perspective
D. All Of The Above
E. (A) And (B)
A. When The Marginal Social Benefit Of Control Is Greater Than Or Equal To The Marginal Social Cost Of Control For All Units Of Pollution
B. When The Marginal Social Cost Of Control Is Zero
C. At No Time, From An Economic Perspective
D. All Of The Above
E. (A) And (B)
22. The Optimal Level Of Pollution Control Occurs When
A. Msb Of Control Equals Msc
B. Pollution Is Zero
C. Msb Of Control Just Exceeds Msc
D. Msb Of Control Is Less Than Msc
E. None Of The Above
A. Msb Of Control Equals Msc
B. Pollution Is Zero
C. Msb Of Control Just Exceeds Msc
D. Msb Of Control Is Less Than Msc
E. None Of The Above
23. The Market Output Level Tends To Be Socially Optimal When
A. Demand Equals Supply In The Market
B. All Costs And Benefits Are Private And Msb=Msc
C. There Is Neither A Shortage Nor A Surplus Of The Product
D. There Are Externalities In Production
E. There Are Externalities In Consumption
A. Demand Equals Supply In The Market
B. All Costs And Benefits Are Private And Msb=Msc
C. There Is Neither A Shortage Nor A Surplus Of The Product
D. There Are Externalities In Production
E. There Are Externalities In Consumption
24. Costs Incurred By The Producer For The Use Of Self-Owned
Resources Are Called
A. Implicit Costs
B. Explicit Costs
C. Accounting Costs
D. Total Costs
E. Marginal Costs
A. Implicit Costs
B. Explicit Costs
C. Accounting Costs
D. Total Costs
E. Marginal Costs
25. Costs Incurred By The Producer To Buy Or Hire Resources
Are Called
A. Implicit Costs
B. Explicit Costs
C. Opportunity Costs
D. Total Costs
E. Marginal Costs
A. Implicit Costs
B. Explicit Costs
C. Opportunity Costs
D. Total Costs
E. Marginal Costs
26. Another Term For Implicit Cost Is
A. Out-Of-Pocket Costs
B. Explicit Costs
C. Opportunity Cost
D. Total Cost
E. Marginal Cost
A. Out-Of-Pocket Costs
B. Explicit Costs
C. Opportunity Cost
D. Total Cost
E. Marginal Cost
27. Payment By A Firm To Hire A Worker Is An Example Of A(N)
A. Implicit Cost
B. Explicit Cost
C. Opportunity Cost
D. Total Cost
E. Marginal Cost
A. Implicit Cost
B. Explicit Cost
C. Opportunity Cost
D. Total Cost
E. Marginal Cost
28. An Upstream Paper Mill Pollutes Water Used By A
Downstream Water Bottling Plant, Forcing The Latter To Clean The Water It Uses.
Which Of The Following Is ?
A. Both Will Over-Produce
B. The Paper Mill Will Under-Produce And The Bottling Plant Will Over-Produce
C. The Paper Mill Will Over-Produce And The Bottling Plant Will Under-Produce
D. Both Will Under-Produce
E. Neither Will Over-Produce Or Under-Produce
A. Both Will Over-Produce
B. The Paper Mill Will Under-Produce And The Bottling Plant Will Over-Produce
C. The Paper Mill Will Over-Produce And The Bottling Plant Will Under-Produce
D. Both Will Under-Produce
E. Neither Will Over-Produce Or Under-Produce
29. Which Of The Following Is A Factor Leading To
Pollution?
A. People Are Inherently Dirty
B. There Are Property Rights To The Environment
C. The Environment Is Collectively Consumed
D. The Law Of Increasing Returns
E. All Of The Above
A. People Are Inherently Dirty
B. There Are Property Rights To The Environment
C. The Environment Is Collectively Consumed
D. The Law Of Increasing Returns
E. All Of The Above
Questions 30 - 34
Refer To The Graph Below.
30. Given The Ppc Tt1, The Cost Of Increasing
Pollution Control From C1 To C2 Is
A. A1a2 Dollars' Worth Of Other Goods And Services
B. Q1q2 Dollars' Worth Of Other Goods And Services
C. C1c2 Dollars' Worth Of Pollution Control
D. Tq1, Dollars' Worth Of Other Goods And Services
E. Unable To Be Determined Without Additional Information
A. A1a2 Dollars' Worth Of Other Goods And Services
B. Q1q2 Dollars' Worth Of Other Goods And Services
C. C1c2 Dollars' Worth Of Pollution Control
D. Tq1, Dollars' Worth Of Other Goods And Services
E. Unable To Be Determined Without Additional Information
31. Which Of The Following Could Explain A Shift In The
Production Possibilities Curve From Tt1 To Tt2?
A. Over-Utilization Of Pollution Control Activities
B. Better Techniques Of Pollution Control
C. Higher Prices For Other Goods And Services
D. Increased Benefits From Pollution Control
E. Better Technology For Producing Other Goods And Services
A. Over-Utilization Of Pollution Control Activities
B. Better Techniques Of Pollution Control
C. Higher Prices For Other Goods And Services
D. Increased Benefits From Pollution Control
E. Better Technology For Producing Other Goods And Services
32. A Technological Advance That Improves Pollution Control
Methods Would Cause Which Of The Following Changes On The Graph? A Movement
From
A. A1 To A2
B. C1 To C2
C. Q1 To Q2
D. Tt1 To Tt2
E. 0 To C2
A. A1 To A2
B. C1 To C2
C. Q1 To Q2
D. Tt1 To Tt2
E. 0 To C2
33. Assuming That The Economy Is Operating On The Ppc Tt1,
The Benefit Of Increasing Pollution Is Shown On The Graph As A Movement
From
A. A2 To A1
B. C2 To C1
C. Q2 To Q1
D. Tt2 To Tt1
E. C2 To 0
A. A2 To A1
B. C2 To C1
C. Q2 To Q1
D. Tt2 To Tt1
E. C2 To 0
34. Operating At Which Point On The Ppc Tt1 Will
Result In The Most Environmental Degradation?
A. T
B. T1
C. T2
D. A1
E. A2
A. T
B. T1
C. T2
D. A1
E. A2
Questions 35 - 39
Refer To The Graph Below.
35. Assume That The Current Market Demand And Supply Curves
For Z Are D2 And S2. If There Are Negative Social
Spillovers Associated With The Production Of Z,
A. Government Should Levy A Per Unit Tax On Z To Shift The Supply Curve Toward S1
B. An Output Greater Than 0g Would Improve Resource Allocation
C. Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1
D. An Output Smaller Than 0g Would Improve Resource Allocation
E. Both (A) And (D)
A. Government Should Levy A Per Unit Tax On Z To Shift The Supply Curve Toward S1
B. An Output Greater Than 0g Would Improve Resource Allocation
C. Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1
D. An Output Smaller Than 0g Would Improve Resource Allocation
E. Both (A) And (D)
36. Assume That The Current Market Demand And Supply Curves
For Z Are D2 And S2. If There Are Positive Social
Spillovers Associated With The Production Of Z:
A. Government Should Levy A Per Unit Tax On Z To Shift The Supply Curve Toward S1
B. An Output Greater Than 0g Would Improve Resource Allocation
C. Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1
D. An Output Smaller Than 0g Would Improve Resource Allocation
E. Both (A) And (D)
A. Government Should Levy A Per Unit Tax On Z To Shift The Supply Curve Toward S1
B. An Output Greater Than 0g Would Improve Resource Allocation
C. Government Should Levy A Per Unit Tax On Z To Shift The Demand Curve Toward D1
D. An Output Smaller Than 0g Would Improve Resource Allocation
E. Both (A) And (D)
37. Assume That The Current Market Demand And Supply Curves
For Z Are D1 And S1 And There Are Positive Social
Spillovers Associated With The Consumption Of Z. Which Curve Could Represent
The Msb Curve For Z?
A. D1
B. D2
C. S1
D. S2
E. None Of The Above
A. D1
B. D2
C. S1
D. S2
E. None Of The Above
38. Assume That The Current Market Demand And Supply Curves
For Z Are D1 And S1 And There Are Positive Social
Spillovers Associated With The Production Of Z. Which Curve Could Represent The
Msc Curve For Z?
A. D1
B. D2
C. S1
D. S2
E. None Of The Above
A. D1
B. D2
C. S1
D. S2
E. None Of The Above
39. If "Z" Is Pollution Control, Which Of The
Following Shifts Illustrates The Effect On The Market For Pollution Control If
New Technology To Control Pollution Is Developed?
A. D1 To D2
B. D2 To D1
C. S1 To S2
D. S2 To S1
E. None Of The Above
A. D1 To D2
B. D2 To D1
C. S1 To S2
D. S2 To S1
E. None Of The Above
Questions 40 - 44
Refer To The Graph Below.
40. If The Discharge Of The Firm Is Q1 Units Per
Day And A Tax Of T1 Per Unit Is Placed On Polluted Discharge, The Firm
Will
A. Clean All Of Its Discharge Of Wastes
B. Clean None Of Its Discharge Of Wastes
C. Spend A0b0 Dollars On Cleaning The Discharge
D. Spend A0q0 Dollars On Cleaning The Discharge
E. (A) And (D)
A. Clean All Of Its Discharge Of Wastes
B. Clean None Of Its Discharge Of Wastes
C. Spend A0b0 Dollars On Cleaning The Discharge
D. Spend A0q0 Dollars On Cleaning The Discharge
E. (A) And (D)
41. A Tax Of T1 Per Unit On Polluted Discharge
Will Induce The Firm To
A. Clean Its Discharge Up To Q1 Units Per Day Rather Than Pay The Tax
B. Pay The Tax Rather Than Clean Discharge Up To Q1 Units Per Day
C. Clean Its Discharge Exceeding Q1 Units Per Day Rather Than Pay The Tax
D. Pay The Tax On All Units
E. (A) And (D)
A. Clean Its Discharge Up To Q1 Units Per Day Rather Than Pay The Tax
B. Pay The Tax Rather Than Clean Discharge Up To Q1 Units Per Day
C. Clean Its Discharge Exceeding Q1 Units Per Day Rather Than Pay The Tax
D. Pay The Tax On All Units
E. (A) And (D)
42. A Tax Of More Than T1 Per Unit On Polluted
Discharge Will Induce The Firm To Clean Up
A. Q1
B. More Than Q1
C. Q
D. More Than Q But Less Than Q1
E. Zero
A. Q1
B. More Than Q1
C. Q
D. More Than Q But Less Than Q1
E. Zero
43. A Tax Of M0 Per Unit On Polluted Discharge
Will Induce The Firm To Clean Up
A. Q1
B. More Than Q1
C. Q
D. More Than Q But Less Than Q1
E. Zero
A. Q1
B. More Than Q1
C. Q
D. More Than Q But Less Than Q1
E. Zero
44. Suppose The Current Tax Is T1 And The Government
Wishes To Allow Less Pollution. It Should
A. Raise The Tax Above T1
B. Lower The Tax Below T1
C. Shift The Mpc Curve To The Left
D. Shift The Mpc Curve To The Right
E. Do None Of The Above
A. Raise The Tax Above T1
B. Lower The Tax Below T1
C. Shift The Mpc Curve To The Left
D. Shift The Mpc Curve To The Right
E. Do None Of The Above
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