EC 238 EXAM MC QUESTIONS AND ANSWERS 2024-2025 VERIFIED REVIEW SOLUTION Under ________ th, Exams of Economics

Download EC 238 EXAM MC QUESTIONS AND ANSWERS 2024-2025 VERIFIED REVIEW SOLUTION Under ________ th and more Exams Economics in PDF only on Docsity! Under the burden is on the to make the right decision about what technology to use: A. technology-forcing standards; pollution control industry B. technology-based standards; polluting firms C. technology-based standards; public regulatory authority D. emission standards; public regulatory authority - ANS-/V A/C Suppose there are two firms in an industry with marginal abatement cost curves: MACA = 180 - 2EA MACB= 300 - 3EB If the government regulator has chosen a target level of total emissions to be 60 units per year ____ permits will need to be issued and they willtradefor —————_—pper permit. A. 130; $72 B. 130; $156 C. 60; $72 D. 60; $156 - ANS-W YD For an industry with MAC = 240 - 8E and MDC = 2E, the socially efficient tax is equal to . A. $80 B. $40 c. $48 D.$24- ANS-W YC  CCME stands for . A. Climate Change from Mobile Emissions B. Climate Change Monitoring of Emissions C. Canadian Council of Ministers of the Environment D. Canadian Conference of the Ministry of Environment - ANS-4 /C Part 2 of the Canada Water Act was successful in reducing . A. biochemical oxygen demand B. phosphorus levels in the Great Lakes C. non-point source emissions of agricultural pesticides D. emissions of dioxins and furans from pulp and paper mills - ANS-/ WB Ontario's command-and-control program to deal with all types of water pollution is known by the acronym . A. MISA B. BATEA C. BPT D. BAT - ANS-“W WA The fact that emissions are diffuse and not concentrated into specific outfalls makes them difficult to control. A. point source B. nonpoint source C. episodic D. persistent - ANS-“~“B  Standards that take the form of never-exceed levels that are applied directly to the quantity of emissions coming from a pollution source are known as . A. emission standards B. ambient standards C. technology-based standards D. bubble standards - ANS-/ “A In practice, it is difficult to achieve the socially efficient outcome through standards because: A. they are a highly decentralized policy B. the burden of proof is on the regulator C. although the regulator has perfect information about firms’ costs, they are not allowed to use this due to privacy laws D. the informational requirements about marginal abatement costs and marginal damages are difficult to meet - ANS-Y“ “D A polluter with MAC = 650 - 5E will abate when faced with an emissions tax of $80 per unit of emissions. A. 16 units B. 114 units C. 146 units D. 250 units - ANS-/“ WA Which of the following statements about abatement subsidies is true? A. Environmental groups like abatement subsidies because they reward polluters. B. Governments like abatement subsidies because they are relatively inexpensive to implement. C. Abatement subsidies are unpopular with firms.  D. Abatement subsidies create perverse incentives for firms to increase emissions when their base levels are being set. - ANS-/ YD When ranking environmental policies from most centralized to least centralized, the correct list is . A. liability laws and property rights; standards; taxes and permits B. standards; taxes and permits; liability laws and property rights C. taxes and permits; liability laws and property rights; standards standards; liability laws and property rights; taxes andpermits - ANS-V WB An emission permit scheme . A. results in the same level of abatement as an emission tax B. results in greater abatement than an emission tax C. results in a lower level of abatement than an emission tax D. gives firms a stronger incentive to abate than an emission tax - ANS-V “A The two areas over which the Constitution grants the Canadian federal government powers to set environmental regulations include: A, Peace, Order and Good Government; and natural resource development B. Peace, Order and Good Government; and ocean and inland fisheries, navigation and shipping C. Peace, Order and Good Government; and private property rights D. Ocean and inland fisheries, navigation and shipping; and natural resource development in remote areas - ANS-“~ WB waterborne pollutants undergo a variety of biological, chemical, and physical processes that change their characteristics after emission until they are assimilated by the water body into which they are released. A. Persistent  B. Degradable C. Accumulative D. Inorganic - ANS-“ 4B The federal government has the jurisdiction to ban or severely limit the release of toxic substances such as dioxans and furans into any waterways under the authority of the . A. Guidelines for Canadian Drinking Water B. Canada Water Act C. Canadian Environmental Protection Act D. Fisheries Act of 1868 - ANS-W YD The Ozone Annex to the 1991 Canada-US Air Quality Agreement addresses the problem of A. acid precipitation B. global warming C. transboundary smog D. the hole in the ozone layer - ANS-4 /C Section91ofthe__gives the powers to enact environmental legislation. A. Constitution Act; provinces B. Constitution Act; federal government C. Canadian Environmental Protection Act; provinces D. Canadian Environmental Protection Act; federal government - ANS-“W /B The fact that neither producers nor consumers factor the costs of disposal into the costs of goods is . A. a negative externality B. a reason why municipal solid waste is a leading problem in urban areas  abatement costs of standards. legal costs of standards. - ANS-/“ WB If the marginal abatement cost function for a given industry is given by MAC = 800 - 2E and the marginal damage cost function for the same industry is known to be MDC = 78E, what is the socially efficient equilibrium standard? 400 units of emissions 10 units of emissions 390 units of emissions 10.5 units of emissions - ANS-V /B Which of the following statements about incentive-based policies is NOT correct? -With incentive-based schemes a regulatory authority needs knowledge of the marginal abatement cost curve in order to design a cost-effective policy. -Incentive-based schemes are more centralized than liability laws and property rights since the regulator must set up the program and monitor emissions. -Economists prefer incentive-based schemes over command-and-control schemes because they are cost-effective. -Incentive-based schemes are less centralized than standards since firms make their own decisions about how to allocate abatement based on market signals they face. - ANS-V “a With an emission tax firms set their level of emissions such that: marginal damage cost equals the tax. total abatement cost equals the tax. marginal abatement cost equals the tax. total abatement cost equals total taxes paid. - ANS-“~WC  If the industry marginal abatement cost curve equals: MAC = 400 - 2E and the marginal damage cost curve is MDC = 50 + 3E, what is the socially efficient emission tax rate? $60 $70 $90 $260 - ANS-¥ 4D The double dividend of emission taxes refers to: -reduced pollution plus lowered taxes on consumption, investment and income. -the tax revenue the government collects due to the emission tax plus the dividends they earn when they invest this tax revenue. -reductions in public debt plus lowered taxes on consumption, investment and income. -charging a tax on emissions plus using the tax revenue to fund government programs. - ANS-“ Ya In a socially efficient permit scheme, the number of permits would equal the number of firms in the industry. the level of abatement that equates marginal abatement cost with marginal damage cost. the socially efficient level of abatement. the socially efficient level of emissions. - ANS-VW “WD An emission permit/allowance scheme will: -result in a lower level of abatement than an emission tax scheme. -give firms a stronger incentive to abate than an emission tax scheme.  -result in greater abatement than an emission tax scheme. -result in the same level of abatement as an emission tax scheme. - ANS-“ “D What is the main difference between Canada and the United States when it comes to environmental regulation? -In Canada most of the regulatory power lies with the provinces/territories whereas in the US, Congress writes environmental laws and the individual states must develop regulations to comply with them. -In Canada most of the regulatory power lies with the federal government and provinces/territories must implement federal standards whereas in the US, most of the regulatory power lies with the individual states. -Canada and the United States share very similar environmental policy setting situations. -Canadian provinces and the federal government have a harmonious relationship setting environmental regulations while in the US, Congress and the states constantly bicker about who has the power to enact legislation. - ANS-4 “A Which of the following is NOT a valid reason for the federal government to request an environmental assessment under the Canadian Environmental Assessment Act? -The proposed project might affect fish and/or fish habitat, aquatic species or migratory birds. -The proposed project might affect provincial Crown lands. -The proposed project might have an environmental impact affecting Aboriginal peoples. -The proposed project might affect federal lands, in a province other than the province where the project is being carried out, or outside Canada. - ANS-“ “B An example of conflicting federal and provincial constitutional powers related to transboundary pollution that established federal jurisdiction over ocean dumping under the Peace, Order and Good Government clause of the Constitution is the case of: Regina versus Dolphin Delivery Ltd.  -The Green Plan resulted in the publication of the National Pollutant Release Inventory starting in 1994. - ANS-V~ VA Which of the following statements about Canadian environmental policy is NOT true? -Environmental legislation in Canada is quite combative between the government regulator and polluters. -Environmental legislation in Canada is primarily enabling rather than mandatory. -Incentive-based policies are much less common than command-and-control policies. -Technology-based standards are widely used. - ANS-“ VA High levels of are associated with high-quality water. dissolved oxygen biochemical oxygen demand ozone chlorine - ANS-V VA Part 2 of the Canada Water Act was successful in reducing: non-point source emissions of pesticides. phosphorus levels in the Great Lakes. biochemical oxygen demand. emissions of dioxins and furans from pulp and paper mills. - ANS-“ /B Ontario issued new drinking water regulations in August 2000 in response to:  -new federal drinking water guidelines issued by the CCME. -the discovery of Trichloroethylene in the water supply in Beckwith Township. -a study commissioned by MISA. -E. coli contamination of the water supply in Walkerton. - ANS-“ “D Nitrogen oxides and volatile organic compounds are both major contributors to the problem of: acid rain. smog. stationary air pollution. particulate matter. - ANS-/V WB An example of a successful incentive-based policy employed in Canada to deal with a specific air pollution problem is: the Ozone Annex. the excise tax added to leaded gasoline in the late 1980s. the National Ambient Air Quality Objective. Ontario's Drive Clean program. - ANS-¥ /B Which of the following is NOT a program overseen by the US Environmental Protection Agency to deal with acid rain? the Countdown Acid Rain Program NOx trading programs  the Acid Rain Program the Clean Air Interstate Rule - ANS-/ “A Dichlorodiphenyltrichloroethane or DDT is: -an aerial defoliant that was used extensively in military campaigns during the Vietnam War. -a powerful insecticide that was in wide use from the 1940s until its eventual ban in 1972. -a toxic organic chemical compound that was once widely used in electrical transformers. -the toxic chemical gas responsible for the 1984 Bhopal disaster. - ANS-/ YB Which of the following is NOT a key feature of CEPA? -the National Pollutant Release Inventory -the Comprehensive Environmental Response, Compensation and -Liability Act -the definition of CEPA Toxic -the Priority Substance Assessment Program and List - ANS-4 “B The effectiveness of the Canadian Environmental Protection Act of 1999 has been questioned because: -the burden of proof is on firms to prove that the substances on the DSL are not harmful. -it continues to rely on command-and-control rather than incentive-based policies. -the NPRI data is made available to the public. -the federal government shares equal authority with the provinces when regulating toxics. - ANS-/ /B Which of the following is NOT an example of one of the problems presented in the example of Canadian regulation of toxic emissions from the pulp and paper industry?  the 1980s the 1960s the Industrial Revolution. the Second World War - ANS-“W WC Between 1990 and 2012, Canada's greenhouse gas emissions: -have fluctuated around 600 million tonnes of CO2. -rose steadily until 2005 and then leveled off at about 690 million tonnes of CO2. -rose steadily until 2003 and then began to decline in response to federal climate change policies. -have shown a strong upward trend. - ANS-4 WD Which of the following statements about Canada's federal climate policy approach since 2000 is true? -Canada has developed plans to implement a trading system for large emitters of CO2. -Between 2007 and 2009, CO2 emissions declined as a consequence of federal climate policy initiatives. -Canada has focused on harmonizing regulations and standards with those of the US. -Canada has a strong international reputation in the area of climate change regulation. - ANS-“ YC Which of the following statements about BC's carbon tax is NOT true? -The BC carbon tax is revenue neutral. -BC's carbon tax covers most types of fuel use and carbon emissions. -Since the BC carbon tax was implemented, fuel use in BC had dropped by 16 per cent by 2014.  -Other provinces have outperformed the BC economy in GDP growth since the carbon tax was implemented. - ANS-/ /D The Montreal Protocol is viewed as a successful treaty in dealing the international issue of ozone depletion. Which of the following is NOT one of the benefits that resulted from reductions of CFCs under the Montreal Protocol? -reductions in greenhouse gas emissions -reductions in the occurrence of skin and eye cancers -increases in technological innovation -reductions in CO2 emissions - ANS-“ WD Which of the following reasons does NOT help explain the lack of success of an international treaty to protect biodiversity? -The problem of protecting species and ecosystems needs to be linked to achieving sustainable development in poor countries. -The threat of species extinction in another part of the world is less tangible than elevated risks of skin cancer or extreme weather events in the developed countries -Climate change is making it easier for species to survive. -Property rights have not been extended to protect the genetic stock of wild, indigenous species. - ANS- vvc In the context of environmental policy, about which of the following policy choice questions does economics NOT say much? -How might resources be allocated between various environmental challenges and other social objectives? -How can society achieve the best environmental quality target for a given cost?  -How do we best allocate our efforts to achieve a given target? -How should the burdens of a policy choice be distributed among nations, citizens, firms and generations? - ANS-““D The precautionary principle suggests that: -society should weigh the trade-off between the costs of reducing pollution today versus the benefits from reduced future risk. -society should weigh the trade-off between making people happy versus making corporations happy. -the government should warn people about the dangers of pollution. -it is always a good idea to spend more money on reducing pollution because you never know how dangerous it can be. - ANS“ VA The goal of reducing the damages caused by the discharge of production and consumption residuals can be achieved by: reducing the quantity of goods and services produced. reducing the residuals from production. increasing recycling. all of the above. - ANS-“ /D The total costs of production equal: -the intersection of the industry supply and demand curves. -the area under the industry supply curve. -price times the level of output. -the industry supply curve. - ANS-/ /B  creative teams. willingness to pay. government intervention. research and development. - ANS-““”D In a market where production of a good results in a negative externality, the socially efficient level of output coincides with: -the point where marginal cost equals marginal social benefits. -the point where supply equals demand. -the point where marginal private cost equals marginal private benefits. -the point where marginal social cost equals marginal social benefits. - ANS-“ YD Which of the following statements best describes the relationship between Pareto optimality and efficiency? -An efficient equilibrium is always Pareto optimal. -Pareto optimality and efficiency mean the same thing. -A Pareto optimum is not an efficient equilibrium. -A Pareto optimum is always an efficient equilibrium. - ANS-4 /D The problem known as "the tragedy of the commons" deals with overuse of acommon resource. A possible solution to this problem is: a)private ownership. b)public ownership. c)fines.  d)both a) and b). - ANS-/ vd) A private producer of a public good cannot extract each individual's marginal willingness to pay for the good because of: the free rider problem. moral hazard. the tragedy of the commons. adverse selection. - ANS-“WA When there is a negative externality from production such as air pollution, the total net social benefits is equal to: -consumer surplus + producer surplus + government surplus. -environmental surplus - consumer surplus - producer surplus. -consumer surplus + producer surplus. -consumer surplus + producer surplus + government surplus + environmental surplus. - ANS-¥ /D The__ the socially efficient equilibrium you are, the __ the total net social benefit will be. a)farther from; higher. b)farther from; lower c)closer to; higher d)both b) and c) are correct - ANS-W Wd) The tradeoff between the costs of controlling pollution and the damage costs caused by pollution is balanced when:  -marginal social cost equals marginal social benefits. -emissions of pollution are zero. -total damage cost is equal to total abatement cost. -marginal abatement cost equals marginal damage cost. - ANS-/V “/D The function that shows the change in damages resulting from a unit change in emissions is: -the ambient damage function. -the marginal damage function. -the emission damage function. -the total damage cost function. - ANS-/V “4B In the diagram above, the marginal cost of abating the 32nd unit of emissions is equal to: - ANS-v ¥ Would be the $ value on the Y axis that coresponds to 32 on the X axis When the equimarginal principle is applied to output costs, a firm with more than one source of production can minimize its total costs of production by: -equating the marginal cost of production across all of its sources. -equating abatement levels across all of its sources. -equating production levels across all of its sources. -equating the marginal cost of abatement across all of its sources. - ANS-VWA Social benefit-cost analysis differs from profit-and-loss analysis done by private firms because:  -There are relatively few people involved. -The causal linkages between pollution and damages are clear. -Damages are easy to measure. -legal values do not reflect willingness to pay. - ANS-“ “D Which of the following is not one of the three conditions that must be satisfied in order for property rights to lead to social efficiency in the case of environmental problems? -Individuals have open access to the environmental resource. -Property rights are well defined, enforceable and transferrable. -Private owners are able to capture all the social values associated with an environmental asset through markets. -There is a system in place where interested parties can come together to negotiate the use of environmental property rights. - ANS-“ /A The fact that a socially efficient equilibrium can be reached regardless of the assignment of property rights is known as the: burden of proof. Pareto optimality condition. opportunity cost doctrine. Coase theorem. - ANS-7 YD Any economic system will produce destructive environmental impacts if the within the system are not structured to avoid them. A.ethics  B.prices C.property rights D.incentives - ANS-V YD The stock of natural and environmental resources that sustain ecosystems, the economy and the well- being of individuals is referred to as A A.renewable resources B.biological diversity C.ambient quality D.natural capita - ANS-“ /D As long as the capacity of the earth's atmosphere to absorb emissions of CO2 is not exceeded,CO2 is a(n) pollutant. Once the capacity of the atmosphere to absorb CO2 is exceeded, it becomes a(n) pollutant. A.episodic; continuous B.non-accumulative; accumulative C.regional; global D.accumulative; non-accumulativ - ANS-//B Marginal Willingness to Pay (MWTP) - ANS-/ “The y value that corresponds with the value on the X they are asking for The fact that my consumption of a public good does not diminish your consumption is called and the fact that once a public good is made available to one individual it automatically becomes available to all is called A.non-exclusion; non-rivalness B.non-rivalness; free-riding  C.free access; non-exclusion D.non-rivalness; non-exclusion - ANS-” “D A marginal damage function that becomes vertical at high levels of emissions represents A.a threshold B.an infinite ambient concentration C.a toxic pollutant D.an environmental catastroph - ANS-¥ “D Fora marginal damage cost function equal to: MD = 0.8E, the marginal damage cost of the 50th unit of emissions is .- ANS-4 WY 40 the total damage cost of 25 units of emissions is equal - ANS-V “the area under the MDC Benefit-cost analysis incorporates valuation of all inputs and outputs related to the project whether or not they are transacted in private markets. A.market B.private C.social D.non-marke - ANS-4 /C An environmental program is if the net effect of that policy has proportionally effect on low-income people as on high-income people .A.proportional; less B.proportional; the same C.proportional; greater