Environmental Econ (ECON 3190) RAT4

Cost effectiveness is a useful criterion for policy evaluation when:

a. technology based standards cannot be imposed

b. the marginal benefit of abatement has already been estimated

c. an acceptable level of pollution is agreed upon but not the means of achieving it

d. the objective is to maximize net present value of pollution control

c. an acceptable level of pollution is agreed upon but not the means of achieving it

Equity in an environmental policy is:

a. when net benefits are proportionate to income

b. when benefits are equally distributed across income groups

c. when net benefits are equally distributed across income groups

d. a matter of opinion and varies across people and over time

d. a matter of opinion and varies across people and over time

Government failure refers to:

a. the fact that all governments collapse eventually

b. the idea that government regulations increase externalities

c. when incentives of public agents work against attainment of efficient policy

d. markets that produce public goods more efficiently than governments

c. when incentives of public agents work against attainment of efficient policy

Transaction costs are:

a. costs of reaching and enforcing agreements

b. the costs of transactions that are incorporated into the price of goods

c. benefits of transactions that are not realized because of constraints on trade

d. none of the above

a. costs of reaching and enforcing agreements

Problems associated with poverty rights as a means of internalizing externalities include:

a. low transaction costs

b. complete markets

c. free riding behavior associated with public goods

d. all of the above

c. free riding behavior associated with public goods

High transaction costs result in:

a. more efficient markets

b. fewer exchanges being made

c. more transactions being made

d. no significant impact on markets

b. fewer exchanges being made

Command and control instruments include:

a. technology standards, effluent standards, and ambient standards

b. input standards, technology standards, and subsidies

c. input standards, technology standards, and taxes

d. taxes, subsidies, and pollution permit programs

a. technology standards, effluent standards, and ambient standards

Emissions standards:

a. restrict use of inputs to productions

b. direct producers to use specific processes to limit emissions

c. limit the amount of pollution emitted by each pollution source

c. limit the amount of pollution emitted by each pollution source

Technology forcing:

a is the lead of setting standards that are unrealistic given current levels of technology

b. increases the incentive for polluters to influence politicians to delay the onset of regulations

c. is designed to motivate the pollution control industry to invent new ways to meet environmental standards

d. all of the above

d. all of the above

A standard that designates the quality of the environment to be achieved is a

a. input standard

b. technology based standard

c. ambient standard

d. emission standard

c. ambient standard

Uniform emissions standards will generally be:

a. efficient as long as transaction costs are low

b. the minimum cost means of achieving a given level of pollution control

c. inefficient if marginal abatement costs vary across polluting sources

d. efficient if marginal abatement costs vary across polluting sources

c. inefficient if marginal abatement costs vary across polluting sources

The equimarginal principle says that total costs of abating a certain amount of pollution are:

a. maximized when all sources have equal marginal costs of abatement

b. minimized when all sources have equal marginal costs of abatement

c. maximized when all sources have equal marginal benefits of abatement

d. minimized when all sources have equal marginal benefits of abatement

b. minimized when all sources have equal marginal costs of abatement

An effective program to ensure compliance with environmental regulations include:

a. monitoring

b. enforcement

c. penalties

d. all of the above

d. all of the above

Low sanctions for violating pollution standards:

a. are most effective when they are lower than the marginal cost of abatement

b. incentivize firm compliance better than higher sanctions

c. can increase enforcement costs as firms are less likely to apply

d. all of the above

c. can increase enforcement costs as firms are less likely to apply

technology standards:

a. direct producers to use specific processes to limit emissions

b. require firms to meet a particular level of emissions per unit of output

c. limit the amount of pollution emitted by each pollution source

d. designate the quality of the environment to be achieved

a. direct producers to use specific processes to limit emissions