1. Environmental regulations tend to be costly if they restrict the ways in which businesses operate (assuming that most businesses are fully aware of how to maximize their profits before the new regulations). Opponents often draw attention to regulatory costs by referring to all environmental regulations as job-killing environmental regulations. Which of the following statements is LEAST correct?

Group of answer choices

- Environmental regulations will not kill jobs. There is plenty of slack in most polluting industries and the minor costs of new environmental regulations will simply be absorbed by the CEO or the companys major individual investors. These people are successful capitalists who can easily get by with lower salaries or lower investment returns for the good of the rest of society.

- Job losses in some sectors are often a necessary part of forcing polluting industries to internalize the negative external costs they have historically imposed on the victims of their pollution. These industries, in the past, have produced more output (and thus hired more workers) than can be justified in terms of the net social benefits derived from their output.

- Defenders of environmental regulations often feel pressured to make heroic arguments that environmental regulations will create plenty of new high-paying jobs in other greener industries that will completely offset any job losses in the regulated industry (even though it may be difficult to prove that everyone who loses a high-paying job in a dirty industry will be able to find an equally well-paid job in a greener industry).

- Defenders could often make a strong case for environmental regulations, even in the face of inevitable job losses in the regulated sectors, by pointing out that these regulations also have substantial human health and/or ecosystem benefits. It is not necessary to insist that the overall costs of environmental regulations be zero. The social benefits of the new regulations could easily outweigh their costs.

2. Stated-preference methods for measuring willingness to pay for environmental public goods are:

Group of answer choices

- Universally preferred by economists to revealed preference methods unless it is impossible to conduct a stated preference study in the context in question.

- Understood and appreciated by all kinds of economists because similar methods are used widely by health economists in countries that have socialized medicine (a public good), by market researchers, and by transportation economists.

- Are particularly well-suited for measuring environmental benefits when the only available data consist of people's choices between alternative recreational destinations that feature this type of environmental public good.

- Sometimes the only method available to determine the existence value of an environmental resource for passive users, given that there is no direct or indirect market information about the demands of these individuals for the good in question.