Which of the following is an example of externalities from production of iron?

Smoke from the stacks of the processing of taconite

Runoff from tailings ponds

Asbestos in tailings dumped into Lake Superior

Rust in water pipes in Flint, Michigan

The cap-and-trade market gave companies allotments of pollution. If they did not generate all their allotted pollution (usually because they installed better cleaning technology), they could sell their rights to pollute to companies who could not afford to install the best technology.

True

False

The marginal social benefit of reducing the initial units of pollution comes with which of the following?

Minimal marginal social costs (it's cheap and the benefits are small to reduce the initial units of pollution).

Large marginal social costs (it's expensive and the benefits are large to reduce the initial units of pollution).

Minimal marginal social costs (it's cheap and the benefits are large to reduce the initial units of pollution).

Contrary to standard economic theory, growth is not limitless or perpetual. Growth from manufacturing relies on raw materials. On a closed planet, each resource is limited. Never-ending growth is impossible because of the Earth's capacity to accept human waste (e.g., pollution from manufacturing and used items that no longer have value in the market).

True

False

Scientists agree that human behavior has an influence on global warming and climate change. In 1997, economists

disagreed, and stated that humans have no impact on the global climate. Furthermore, no preventative measures that will hurt the economy should be taken or considered.

agreed that humans influence global climate, but argued that climate change is associated with rather insignificant economic, social, geopolitical, and environmental risks; therefore, no preventive actions should be taken.

agreed that humans influence global climate, and that this climate change is associated with significant economic, social, geopolitical, and environmental risks that justify preventive action

Externalities are the effects from economic transactions that are not accounted for (captured) by the price system. (They are costs associated with the production of a good for which the producer does not have to pay.) Which of the following is an example of externalities?

Cars with low fuel efficiency

All of these are examples of externalities.

Trash and grass clippings

Air and water pollution

Standard economists argue for greater rationality in markets and how risks are ordered. Fixing the radon problem in American homes, which caused as many as 20,000 lung cancer deaths, would cost a mere $1000/home, so approximately $100 million a year to fix. Yet American consumers (and policies) are focused more on which of the following?

Oil spill sites

Water reclamation sites

Hazardous waste sites

Acid rain sites

Carbon taxes are an effort by government to influence markets to which of the following ends?

Increase the power of government agencies

Decrease the number of government agencies

Influence behavior and the market to limit the amount of carbon dioxide released into the atmosphere

Hurt local industry while helping offshore firms that do not have to comply with the tax

Cap-and-trade systems (or the tradable emission permit system in the U.S.) was a constructed market created by and constituting which of the following?

The U.S. EDF; allowances of pollution of all pollutants

The U.S. EPA; annual allowances of pollution of particular pollutants

The U.S. EPA; monthly allowances of pollution of particular pollutants

The U.S. EDF; allowances of pollution of particular pollutants

The marginal social benefit of reducing the later (or final) units of pollution come with which of the following?

Significant marginal social benefits (it's expensive and the benefits are miniscule to reduce the later initial units of pollution)

Minimal marginal social costs (it's cheap and the benefits are miniscule to reduce the later initial units of pollution)

Significant marginal social costs (it's expensive and the benefits are miniscule to reduce the later initial units of pollution)

Which of the following best describes government intervention in markets in cases of environmental pollution that have human health impacts (e.g., asbestos in drinking water as a result of iron production and smog from nitrogenous compound emitting cars)?

Unnecessary intervention and overregulation on the part of the government and EPA

A necessary tool to correct the market to incorporate social costs into the supply and demand curves that regulate markets

A strategy to keep businesses from polluting

Which of the following is an example of the principle of perfection? (Select all that apply.)

Banning nuclear plants because nuclear energy is hazardous and creates waste

Banning alcohol because it leads to social problems such as drunken driving

Banning cars that create cancer-causing smog