Question_Doc14_15Dec_7th

Question_Doc14_15Dec_7th

Question

39) The exclusive rights of ownership of property are
generally referred to as

A) level property rights.

B) private property rights.

C) public property rights.

D) common property rights.

40) A resource that is a common property is

A) oil on land owned by a drilling and refining company.

B) natural gas on land owned by an energy producer.

C) timber on land owned by a lumber company.

D) water in a publicly owned river.

41) Property that is owned by everyone and therefore by no
one in particular is referred to as

A) common property.

B) social property.

C) private property.

D) commercial property.

42) Property owned by everyone (and thus no one in
particular) is generally referred to as

A) social property.

B) private property.

C) common property.

D) natural property.

43) Which of the following is NOT an example of common
property?

A) a trampoline

B) air

C) gravity

D) sunshine

44) Which type of property would be the most likely to
experience pollution?

A) common property

B) private property

C) property held in partnership

D) corporate property

45) For voluntary action to correct an externality,

A) transaction costs have to be high.

B) transaction costs have to be low.

C) transaction costs have to be split evenly between all of
the parties involved.

D) transaction costs are irrelevant.

46) All of the costs associated with making and enforcing
contracts are referred to as

A) alternative costs.

B) opportunity costs.

C) marginal costs.

D) transactions costs.

47) In a situation in which property rights are not
well-defined and social costs exceed private

costs, government can use all of the following to induce
producers to bring private costs into

alignment with social costs EXCEPT

A) taxing production.

B) coercive limits on production.

C) subsidization of production.

D) regulation of production.

48) Suppose a large tree on Adam’s property blocks Eve’s
view of the ocean. Adam accepts Eve’s

offer of $15,000 to cut down the tree. This is an example of

A) internalizing externalities via voluntary agreements.

B) a result of logrolling.

C) a consequence of a positive externality.

D) a consequence of private costs exceeding social costs.

49) The costs associated with the negotiation and
enforcement of an agreement are

A) property costs.

B) resource factor costs.

C) transaction costs.

D) attorney fees.

50) When property rights are clearly defined, there is
generally a

A) law that must be passed to ensure fairness.

B) regulatory agency that handles externalities.

C) common property problem.

D) voluntary agreement that can be reached.

51) In order for a voluntary agreement to be reached in
general, transaction costs should be

A) infinite.

B) high relative to expected marginal benefits of the
agreement.

C) low relative to expected marginal benefits of the
agreement.

D) determined by the Environmental Protection Agency.

52) What is common property? What does common property have
to do with externalities?

53) Why are externalities associated with common property
rather than private property?

54) Explain why the buffalo almost became extinct while
cattle did not, even though both

provide similar goods for people.

1) The Framework Convention on Climate Change took place in

A) the 1973-1979 Tokyo Round

B) the 1987-1993 Uruguay Round

C) the 1997 Kyoto Protocol

D) the 2001 Doha Round

2) In the Kyoto Protocol, participating nations agreed to

A) trade carbon-dioxide permits.

B) eliminate all emissions of greenhouse gases by 2020.

C) reduce their overall emissions of greenhouse gases
between 1997 and 2020 to as much as 20

percent below 1990 levels.

D) buy greenhouse gas emission permits from developing
nations.

3) In 2005, the European Union began a program to

A) reduce greenhouse gas emissions by 10 percent within 5
years.

B) eliminate greenhouse gas emissions by 50 percent within
15 years.

C) subsidize firms that pollute more than a given limit.

D) allow the trading of carbon-dioxide permits among firms.

4) In a market for emission permits, firms that emit over
their allowed limits

A) are forced to shut down.

B) are taxed by the government for the amount of emissions.

C) receive a subsidy for the amount of emissions.

D) pay a price of these emissions.

5) In a market for emission permits, firms that emit over
their allowed limits

A) are forced to shut down.

B) are taxed by the government for the amount of emissions.

C) will sell their excess allowances through a trading
system.

D) must buy more allowances through a trading system.

6) In a market for emission permits, firms that emit below
their allowed limits

A) will buy even more allowances through a trading system.

B) are taxed by the government for the amount of emissions.

C) receive a subsidy for the amount of emissions.

D) will sell their excess allowances through a trading
system.

7) In theory, the Emissions Trading Scheme would

A) cause firms to generate more pollution than their allowed
limits.

B) cause firms to generate less pollution than their allowed
limits.

C) raise the production costs of all firms.

D) lower the production costs of all firms.

8) Under the Emissions Trading Scheme, what would happen if
governments reduce firms’

pollution caps?

A) The market clearing price of pollution permits will
increase.

B) The market cleaning price of pollution permits will
decrease.

C) The marketing cleaning price of pollution permits will
not change.

D) The marketing clearing price of pollution permits will
cease to exist.

9) The 1997 Kyoto Protocol was signed by

A) only the United States and the European Union.

B) only nations in Asia.

C) more than three dozen nations.

D) all nations in the world.

10) The Kyoto Protocol was signed by participating nations
in

A) 1872.

B) 1972.

C) 1997.

D) 2007.

11) Participating nations in the 1997 Kyoto Protocol agreed
to reduce overall greenhouse gases

emission

A) to as much as 20 percent below the levels of the 1990s
through 2020.

B) to as much as 10 percent below the levels of the 1990s
through 2010.

C) to as much as 100 percent below the levels of the 1990s
through 2007.

D) to as much as 50 percent below the levels of the 1990s
through 2100.

12) The Emission Trading Scheme of the European Union

A) created a market for pollutants.

B) sets a cap on the amount of pollutants in each country.

C) allowed firms to benefit from emitting pollutants.

D) sets the amount of per-unit tax on each pollutant.

13) Which of the following best describes the impact of the
Emissions Trading Scheme in the

European Union between 2005 and the late 2000s?

A) Overall greenhouse gas emissions increased.

B) Overall greenhouse gas emissions decreased.

C) Overall greenhouse gas emissions were totally eliminated.

D) Overall greenhouse gas emissions were constant.

14) Which of the following was signed in the Kyoto Protocol?

A) The Framework Convention on Climate Change

B) The Zero Greenhouse Gas Agreement

C) The Treaty on Global Warming

D) The Emission Trading Scheme

15) Participating nations in the 1997 Kyoto Protocol agreed
to reduce overall greenhouse gases

emission through 2020 to

A) as much as 20 percent below the levels in the 1990s.

B) as much as 5 percent below the levels in the 1990s.

C) as much as 50 percent below the levels in the 1990s.

D) as much as 50 percent below the levels in the 1960s.

16) The EU Emission Trading Scheme created a market for

A) permits to emit greenhouse gases.

B) cigarettes.

C) marijuana.

D) devices that lower the global temperature.

17) Which of the following is TRUE of the European Union’s
Emissions Trading Scheme?

A) Firms are taxed based on the their pollution levels.

B) Firms are forced to shut down when they exceed their
pollution limits.

C) Governments subsidize firms to develop devices to reduce
pollution.

D) Firms can trade pollution permits to meet their pollution
limits.

18) By 2006, the market price of European Union emissions
allowances dropped because

A) governments set their overall emission caps too high.

B) firms had drastically reduced their emissions.

C) firms underreport their emission amounts.

D) the market did not clear.

19) If pollution is bad, why do we still use
pollution-causing resources such as coal and oil to

generate electricity?

A) Governments lack the political will to enforce the use of
pollution free resources.

B) The cost of using pollution free resources to generate
power in many circumstances is much

higher than generating that same power through conventional
pollution-causing means.

C) Pollution is only a private cost.

D) The transaction costs of pollution is too low.

20) Explain how a market for pollutant emission allowances
can induce firms to reduce the

amount of emissions.

21) “Creating a free market for carbon-dioxide emission
permits would only encourage firms to

pollute more.” Do you agree or disagree? Why?

22) “Creating a free market for carbon-dioxide emission
permits would only encourage firms to

pollute more.” Do you agree or disagree? Why?

1) Many ecologists argue that several species of whales are
close to extinction. If this is true, the

reason is

A) inadequate enforcement of international laws.

B) whales are a type of common property.

C) the marginal benefit of hunting and killing a whale is
greater than zero.

D) whale-killing technology is too productive.

2) All of following are commonly considered to be common
property EXCEPT

A) spotted owls in the wild.

B) fish in an ocean.

C) chickens raised in a farm.

D) wild salmon in a river.

Question_Doc14_15Dec_7th


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Preview: a xxxxxx property xxxxxxxx A person xxxxxxxx private property xxxxxx on x xxxxxxx by xxxxxxx it, so xxxx were overhunted xxxx private xxxxxxxx xxxxxxx people xxxx an incentive xx husband the xxxxxxxx so xxxxx xxxx be xxxxxxx available in xxx future 31 x Reducing xxxxxxxxxx xxxxxx Footprint: xxxxxxxxxxx Pollution-Causing Activities1) xxx Framework Convention xx Climate xxxxxx xxxx place xxxx the 1973-1979 xxxxx RoundB) the xxxxxxxxx Uruguay xxxxxxx xxx 1997 xxxxx ProtocolD) the xxxx Doha RoundAnswer: xxx In xxx xxxxx Protocol, xxxxxxxxxxxxx nations agreed xxxx trade carbon-dioxide xxxxxxx B) xxxxxxxxx xxx emissions xx greenhouse gases xx 2020 C) xxxxxx their xxxxxxx xxxxxxxxx of xxxxxxxxxx gases between xxxx and 2020 xx as xxxx xx 20 xxxxxxx below 1990 xxxxxx D) buy xxxxxxxxxx gas xxxxxxxx xxxxxxx from xxxxxxxxxx nations Answer: xxx In 2005, xxx European xxxxx xxxxx a xxxxxxx toA) reduce xxxxxxxxxx gas emissions xx 10 xxxxxxx xxxxxx 5 xxxxx B) eliminate xxxxxxxxxx gas emissions xx 50 xxxxxxx xxxxxx 15 xxxxx C) subsidize xxxxx that pollute xxxx than x xxxxx limit xx allow the xxxxxxx of carbon-dioxide xxxxxxx among xxxxx xxxxxxx D4) xx a market xxx emission permits, xxxxx that xxxx xxxx their xxxxxxx limitsA) are xxxxxx to shut xxxx B) xxx xxxxx by xxx government for xxx amount of xxxxxxxxx C) xxxxxxx x subsidy xxx the amount xx emissions D) xxx a xxxxx xx these xxxxxxxxx Answer: D5) xx a market xxx emission xxxxxxxx xxxxx that xxxx over their xxxxxxx limitsA) are xxxxxx to xxxx xxxx B) xxx taxed by xxx government for xxx amount xx xxxxxxxxx C) xxxx sell their xxxxxx allowances through x trading xxxxxx xx must xxx more allowances xxxxxxx a trading xxxxxx Answer: xxx xx a xxxxxx for emission xxxxxxxx firms that xxxx below xxxxx xxxxxxx limitsA) xxxx buy even xxxx allowances through x trading xxxxxx xx are xxxxx by the xxxxxxxxxx for the xxxxxx of xxxxxxxxx xx receive x subsidy for xxx amount of xxxxxxxxx D) xxxx xxxx their xxxxxx allowances through x trading system xxxxxxx D7) xx xxxxxxx the xxxxxxxxx Trading Scheme xxxxxxx cause firms xx generate xxxx xxxxxxxxx than xxxxx allowed limits xx cause firms xx generate xxxx xxxxxxxxx than xxxxx allowed limits xx raise the xxxxxxxxxx costs xx xxx firms xx lower the xxxxxxxxxx costs of xxx firms xxxxxxx xxx Under xxx Emissions Trading xxxxxxx what would xxxxxx