Question
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.
31.5 Reducing Humanity's Carbon Footprint: Restraining
Pollution-Causing Activities
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?
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.
3) Which of the following is most likely to be common
property?
A) a cat in a house
B) farm raised catfish in Alabama
C) tuna in the Pacific Ocean
D) cattle in a Texas ranch
.
4) Which of the following are most likely to become an
endangered species?
A) animals in the wild
B) domesticated animals
C) animals that people like to keep at home as pets
D) animals that people have property rights to own