Environmental Econ (ECON 3190) RAT2

The socially efficient level of emissions is when

a) marginal damages from emissions equal marginal abatement cost

b) marginal benefit of abatement is greater than marginal cost of abatement

c) pollution has been eliminated

d) all firms reduce emissions equally

a

As emissions increase, marginal damages tend to

a) decrease

b) increase

c) decrease unless there is a threshold level

d) stay the same, increasing total damages at a steady pace

b

Reduction in damages from pollution

a) are the benefits of abatement

b) are the costs of abatement

c) include increased respiratory illness

d) none of the above

a

Marginal abatement costs

a) decrease as total abatement rises

b) increase as abatement rises

c) decrease when damages are reversible

d) both b and c

b

Cost effectiveness is a useful alternative to benefit cost analysis when

a) it is important to the decision makers to estimate the value of the policy goals

b) decision makers are only interested in the impact of the policy on local unemployment

c) there is agreement on the objective but not how to reach it

d) cost effectiveness can never serve as an alternative to benefit cost analysis.

c

An analysis that estimates the effect of expansion of a wildlife refuge on employment levels and income on people living in the vicinity of the refuge is an example of

a) environmental impact analysis

b) economic impact analysis

c) non market valuation

d) benefit cost analysis

b

A benefit cost ratio equal to one implies:

a) Net benefits are zero

b) Net benefits are negative

c) Net benefits are small but positive

d) Net benefits are maximized

a

A reduction in marginal cost of enforcement of pollution regulation

a) results from technological improvements in abatement

b) will result in the efficient levels of emissions being lower

c) will result in the efficient level of emissions being higher

d) will move the market closer to the equimarginal outcome

b

Horizontal Equity

a) refers to treating differently situated people the similarly

b) refers to treating similarly situated people similarly

c) cannot be assessed using benefit cost analysis

d) can only be assessed through risk valuation

b

Recalculating and comparing net benefits when there is a change in an important parameter in the analysis, such as the discount rate is

a) risk valuation

b) sensitivity analysis

c) economic impact analysis

d) resource damage assessment

b

Identification and elaboration of all repercussions of a designated activity on the natural and environment resource base is:

a) Natural resource damage assessment

b) Environmental impact analysis

c) Economic impact analysis

d) Benefit cost analysis

b

Environmental risk analysis involves the study of

a) how different policies affect the levels of environmental risk to which people are exposed

b) what values people place on risk reduction

c) where risk comes from and how people normally respond to it

d) all of the above

d

Risk benefit analysis is

a) like cost benefit analysis in which the cost are measured in terms of risk.

b) most useful when people are risk neutral

c) not helpful when risk is difficult to value in monetary terms

d) both a and b are true

a

Which of the following is true about discounting

a) It is a way to determine today's value of benefits or costs that will accrue some time in the future.

b) It allows the comparison of policies that have different time profiles of net benefits

c) Both a and b are true

d) Neither a nor b are true

c

A high discount rate implies

a) a low rate of inflation

b) a dollar in one year is very similar to a dollar in any other year

c) a dollar in the near term is much more valuable than one later in time

d) a dollar in the near term is much less valuable than one later in time

c