Chapter 2: Environmental Economics and Policy

What is the first step in the environmental policy process?

• guide the solution to law
• identify the problem
• get organized
• gain access to policy makers

Which statement about the relationship between economics and the environment is true?

• Internal and external environmental costs are usually considered equally.
• Long-term effects often receive more weight than short-term effects.
• Harm to the environment can harm economies.
• The relationship usually receives serious consideration.

“Energy Star,” “USDA Organic,” and “Fair Trade Certified” are all examples of

• ecosystems
  ecosystems
• ecolabelling
• non-market values
• market failure

In the U.S., laws enacted from the 1780s to the late 1800s reflected the perception that

• the amount of land and natural resources in the West was endless.
• the natural resources of the West could be used up and required legal protection.
• Americans were living amid dirtier air, dirtier water, and more waste and toxic chemicals.
• a sustainable future should be a primary goal.

A law that prohibits dumping wastes into the ocean and punishes people who dump wastes demonstrates which approach to environmental policy?

• green tax
• command-and-control
• cap-and-trade
• subsidy

A law that prohibits dumping wastes into the ocean and punishes people who dump wastes demonstrates which approach to environmental policy?

• green tax
• command-and-control
• cap-and-trade
• subsidy

A power company is given free land by the government to reduce the cost of providing wind-generated electricity to rural residents. This is an example of a

• command and control approach
• cap and trade system
• subsidy
• green tax

The amount of a product offered for sale at a given price is

• benefit
• cost
• demand
• supply

When demand for a product is low, the producer will

• raise price and drop supply
• raise price and supply
• drop price and raise supply
• drop price and supply

Some people argue that because Earth’s resources are ultimately limited, nonstop economic growth is

• not a problem
• inevitable
• not sustainable
• highly desirable