Quiz about Environmental economics

Question 1

Which of the following problems is most likely to prevent successful implementation of the EU's Greendeal?

Accepted Answer

Holdout effect

Answer

Free market environmentalism

Answer

Holding effect

Answer

Free-rider effect

Question 2

Which of the following does not represent the same curve?

Accepted Answer

private marginal cost curve

Answer

private marginal benefit curve

Answer

maximum willingness to pay curve

Answer

demand curve

Question 3

Which of the following statements is correct about a shift of the demand curve for gasoline?

Accepted Answer

A decrease in income shifts the demand curve to the left

Answer

A decrease in the price of public transportation shift the demand curve to the right

Answer

An increase in the price for gasoline shifts the demand curve to the right

Answer

A decrease in the price of gasoline shift the demand curve to the right

Question 4

Consider a society with two individuals, who value forest preservation. Which of the following statements is true?

Accepted Answer

Their willingness to pay for forest preservation is likely to be lower than their marginal private benefit

Answer

Their willingness to pay for forest preservation is likely to be higher than their marginal private benefit

Answer

Their willingness to pay for forest preservation is likely to be the same as their marginal private benefit

Answer

The marginal benefits of each acre preserved increase with more preservation

Question 5

Which of the following pollution control policy instruments are marked based?

Accepted Answer

Pollution taxes and tradable pollution permits

Answer

Technology-based regulations and emission standards

Answer

Pollution taxes and emission standards

Answer

Emission standards and tradable pollution permits

Question 6

For which of the following pollutants would a market mechanism be effective?

Accepted Answer

Uniformly mixed regional pollutants

Answer

Non-uniformly mixed local pollutants

Answer

Non-uniformly mixed regional pollutants

Answer

Uniformly mixed local pollutants

Question 7

Which of the following pollution levels is the optimal level of pollution according to economists?

Accepted Answer

Pollution according to the equimarginal principle

Answer

Unregulated market outcome

Answer

When the marginal damage of pollution is smaller than the marginal benefits

Answer

Zero pollution

Question 8

When considering noise pollution, why is the marginal propensity to consume (MPC) increasing in output?

Accepted Answer

the law of diminishing returns

Answer

economies of scale

Answer

it is the supply curve

Question 9

When considering noise pollution, why is the marginal external cost (MEC) increasing in output?

Accepted Answer

damage of pollution increases more than proportional

Answer

the law of diminishing returns

Answer

pollution increases more than proportional with output

Question 10

Global Climate Change - Which of the following measures is an example of an adaptive strategy?

Accepted Answer

Building dikes

Answer

Planting more trees

Answer

Using backstop energy technologies

Answer

Implementing a carbon tax to reduce emissions

Question 11

Global Climate Change - Which one of the following statements regarding carbon taxes is false?

Accepted Answer

A revenue-neutral carbon tax implies an increase in income and other taxes.

Answer

Carbon taxes would not set the exact level of carbon emissions.

Answer

Carbon taxes would increase coal prices more than other fossil fuel prices

Answer

Carbon taxes would reduce negative environmental externalities.

Question 12

What is the main advantage of a system of tradable permits relative to a carbon tax?

Accepted Answer

The level of total emissions is known with certainty.

Answer

It is easier to understand.

Answer

It results in a lower level of price increases to consumers.

Answer

The price of permits is known with certainty.

Answer

It encourages technological innovation.

Question 13

Which economic characteristic of climate change is not correct?

Accepted Answer

The private costs of greenhouse gas emissions generally exceed the societal costs of these emissions

Answer

Greenhouse gas emissions have intergenerational welfare consequences

Answer

Greenhouse gas emissions affect a public good which is the atmosphere

Answer

Climate change is a global externality in terms of both causes and effects

Question 14

Climate Economics - Which statement about the discount rate in studies about the economic costs of climate change is not correct?

Accepted Answer

Using a higher discount rate results in a higher value of the social costs of carbon

Answer

Estimates of the social costs of carbon are sensitive to the assumed discount rate value

Answer

That future costs matter less if society is richer in the future is one of the motivations for discounting

Answer

Individual impatience is one of the motivations for discounting

Question 15

ETS - Which allocation method for emission allowances has a fairness concern?

Accepted Answer

Grandparenting

Answer

Output based allocation

Answer

Benchmark

Answer

Auctioning

Question 16

ETS - Which of the following is not the benefits of auctioning emission allowances?

Accepted Answer

Reduce carbon leakage

Answer

Reward early action

Answer

Reveal true carbon price

Answer

Reduce windfall profits

Question 17

ETS - Which of the following statement about the ETS is correct?

Accepted Answer

To achieve the abatement goal of the Paris agreement, it is important to have a stable and high price for the emission allowances

Answer

The initial allocation of the emission allowances in the ETS will affect the performance of the ETS under competitive market with zero transaction costs

Answer

The ETS is cost effective if the abatement costs are similar

Answer

The total greenhouse gas emission is uncertain under the ETS

Question 18

Common Pool Resource - The open-access equilibrium is usually ...

Accepted Answer

Neither economically efficient nor ecologically sustainable

Answer

Economically efficient and ecologically sustainable.

Answer

Economically inefficient but ecologically sustainable.

Answer

Economically efficient but ecologically unsustainable

Question 19

Common Pool Resource - The efficient price of a license fee is determined by the difference between ...

Accepted Answer

Average revenue and marginal cost

Answer

Total revenue and total cost

Answer

Total revenue and marginal cost

Answer

Average revenue and total cost

Answer

Marginal revenue and marginal cost

Question 20

Common Pool Resource - A characteristic of public goods is that use of the good by one person does not reduce its availability to others. The term for this characteristic is...

Accepted Answer

Non-rival

Answer

Transferable

Answer

Non-exclusive

Answer

Perfectly elastic

Question 21

Common Pool Resource - The inflection point on a logistic growth curve is the point where ...

Accepted Answer

Annual growth rates are maximised.

Answer

Carrying capacity is reached.

Answer

The stable equilibrium is reached.

Answer

The unstable equilibrium is reached.

Answer

The natural equilibrium is reached.

Question 22

Common Pool Resource - What is the typical relationship between the economic optimum (E*), maximum sustained

yield (EMSY), and the open-access equilibrium (EO)?

Accepted Answer

EO is higher than both E* and EMSY.

Answer

EO is higher than E* but lower than EMSY.

Answer

EO is lower than both E* and EMSY.

Answer

EO is lower than E* but higher than EMSY.

Answer

E* is higher than EMSY but lower than EO.

Question 23

Common Pool Resource - Which one of the following policies would not encourage sustainable fishery management?

Accepted Answer

An increase in bycatch allowances

Answer

Ecolabeling

Answer

A system of individual transferable quotas

Answer

Quotas on total fishery catch

Answer

Certification of sustainable fishery products

Question 24

International trade & environment - What theory states that trading partners both benefit from trade through specialisation in the goods each can produce most efficiently?

Accepted Answer

Comparative advantage

Answer

Demographic transition

Answer

Absolute advantage

Answer

Industrial symbiosis

Answer

Environmental Kuznets Curve

Question 25

Environmentally beneficial effects of liberalised trade can include all of the following except:

Accepted Answer

Reduced emissions from transportation

Answer

Reduced materials and energy use per unit of output

Answer

Spread of environmentally-friendly technology

Answer

Removal of distortionary subsidies

Answer

Development of more efficient power plants

Question 26

The specificity rule states that...

Accepted Answer

Policy solutions should be targeted directly at the source of a problem

Answer

Per-capita environmental impacts eventually decrease as affluence levels increase

Answer

International trade organisations should be responsible for environmental protection

Answer

Free trade will tend to increase social welfare because of comparative advantage

Answer

Imports cannot be restricted because of specific production practices in the exporting country

Question 27

The NAFTA Commission on Environmental Cooperation (CEC)...

Accepted Answer

Produces reports on environmental issues but has few enforcement powers

Answer

Places tariffs on corn imports to protect the environment

Answer

Has ordered a phase-out of environmentally damaging gasoline additives

Answer

Requires harmonisation of environmental regulations

Answer

Penalises corporations that harm the environment

Question 28

Water economics - The main problem with desalination to increase water supplies is that ...

Accepted Answer

It is very expensive.

Answer

Supplies are usually contaminated with pesticides.

Answer

Communities tend to be located too far from water supplies

Answer

Water tends to evaporate before it can be used.

Answer

There are few available sources.

Question 29

Which one of the following is an example of demand-side water management?

Accepted Answer

Increasing water prices

Answer

Expanded development of groundwater aquifers

Answer

Building small dams

Answer

Building large dams

Answer

Desalination

Question 30

Which one of the following policies would not reduce water use?

Accepted Answer

Subsidising irrigation systems

Answer

Reusing wastewater for industrial uses

Answer

Removing water subsidies

Answer

Full marginal-cost pricing

Answer

Micro-irrigation technology

Question 31

Which price structure would tend to most effectively promote water conservation?

Accepted Answer

Increasing block structure

Answer

Uniform block structure

Answer

Constant price structure

Answer

Marginal price structure

Answer

Decreasing block structure

Question 32

Experimental Economics - Which of the following experiments has the highest level of control?

Accepted Answer

Artefactual field experiment

Answer

Natural field experiment (RCT)

Answer

Framed field experiment

Answer

Natural experiment

Environmental economics

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