Environmental Econ (ECON 3190) RAT3

Direct measures of reduction in damages of pollution include

a. value of the change in producer surplus of agricultural production

b. reduced health care costs related to asthma

c. value of the reduction in lost work days

d. all of the above

d. all of the above

A problem related to direct damage approaches is that they do not account for

a. untreated pain and suffering

b. values

c. changes in behavior to avoid damages

d. all of the above

d. all of the above

Which of the following is an example of an averting behavior model for measuring the benefits people would put on cleaning up pollution?

a. the additional travel cost incurred to recreate due to closure of a preferred recreational area.

b. expenditures on new water filters to avoid contaminants that cause health problems

c. the reduction in abatement cost due to adoption of new technology for pollution control

d. expenditures on a new waterfront house for easier recreational access.

b. expenditures on new water filters to avoid contaminants that cause health problems

The value of statistical life (VSL) is a measure

a. used in contingent valuation

b. of the value of a reduction in exposure to an environmental risk to a specific person

c. the value of reducing the probability of illness or premature death for. a random individual in the population

d. that is consistent across industries when using wage rate studies

c. the value of reducing the probability of illness or premature death for. a random individual in the population

The travel cost method is based on the premise

a. that surveys of individuals at different recreational sites will provide information about the appropriate level of pollution at camp sites

b. that travel cost to a site can be regarded as the price of access to the site

c. existence value can be effectively measured from the observed behavior

d. both b and c

b. that travel cost to a site can be regarded as the price of access to the site

Hypothetical bias is:

a. a concern regarding contigent valuation

b. a concern regarding the travel cost method

c. the possibility that people respond differently to hypothetical situations than when they have to pay real money

d. Both a and c are true

d. Both a and c are true

Environmental value of an environmental amenity is

a. the value of finding a substitute for the environmental amenity

b. the value of preserving something even though one might never see it

c. the value arising out of some probability that the resource may be used at a later

d. determined using the hedonic pricing method

b. the value of preserving something even though one might never see it

Revealed preferences:

a. are used primarily to estimate nonuse values

b. can be inferred from a person's actions

c. are based on voting behavior

d. measure producer surplus

b. can be inferred from a person's actions

Directly questioning people about their willingness to pay for a good or service is:

a. a stated preference method

b. benefit transfer

c. hedonic pricing

d. indirect valuation

a. a stated preference method

A willingness to pay to ensure that future generations will be able to enjoy the benefits of a particular environmental resource is a:

a. Bequest value

b. Existence value

c. Use value

d. Option value

a. Bequest value

Stated preferences:

a. can be used to estimate use or nonuse values

b. are based on voting behavior

c. can be inferred from a person's activities

d. none of the above

a. can be used to estimate use or nonuse values

Transfer payments are:

a. an important opportunity cost to account for in benefit cost analysis

b. part of social costs in determination of efficiency

c. only part of the social cost if they fall on businesses

d. are not true opportunity costs

d. are not true opportunity costs

The with/without principle

a. is the same as the before/after principle

b. estimates the difference in cost with a new law in place compared to what they were prior to the law being implemented

c. estimates the difference in cost with a new law in place compared to what they would have been in the absence of the law

d. both a and b

c. estimates the difference in cost with a new law in place compared to what they would have been in the absence of the law

The costs of environmental protection programs do not include

a. environmental costs

b. transfer payments

c. enforcement costs

d. opportunity costs

b. transfer payments

Because cost data for compliance with environmental law typically come from

a. the EPA, they are usually accurate

b. surveys of existing firms, they are often understated

c. surveys of existing firms, they are often overstated

d. surveys of existing firms, they are usually only included in economic impact analyses

c. surveys of existing firms, they are often overstated