Environmental Economics

Description: Environmental Economics Quiz
Number of Questions: 14
Created by:
Tags: environmental economics pollution externalities natural resources sustainability
Attempted 0/14 Correct 0 Score 0

What is the primary focus of environmental economics?

  1. The study of the impact of economic activities on the environment

  2. The study of the impact of environmental policies on the economy

  3. The study of the relationship between economic growth and environmental degradation

  4. The study of the economic value of natural resources


Correct Option: A
Explanation:

Environmental economics is the branch of economics that studies the relationship between economic activities and the environment. It examines how economic activities affect the environment and how environmental policies can be used to mitigate these impacts.

What is an externality?

  1. A cost or benefit that is imposed on a third party as a result of an economic activity

  2. A cost or benefit that is incurred by a firm as a result of its own economic activity

  3. A cost or benefit that is shared by all members of society

  4. A cost or benefit that is not taken into account in the market price of a good or service


Correct Option: A
Explanation:

An externality is a cost or benefit that is imposed on a third party as a result of an economic activity. Externalities can be positive or negative. For example, a factory that pollutes the air imposes a negative externality on the people who live nearby. A park that provides recreation opportunities creates a positive externality for the people who live nearby.

What is the Coase Theorem?

  1. A theorem that states that externalities can be eliminated through bargaining between the parties involved

  2. A theorem that states that externalities can be eliminated through government intervention

  3. A theorem that states that externalities are always harmful to society

  4. A theorem that states that externalities are always beneficial to society


Correct Option: A
Explanation:

The Coase Theorem states that externalities can be eliminated through bargaining between the parties involved. This is because the parties involved can negotiate a mutually beneficial agreement that takes into account the costs and benefits of the externality.

What is the tragedy of the commons?

  1. A situation in which a common resource is overused because each individual user has an incentive to overuse it

  2. A situation in which a common resource is underused because each individual user has an incentive to underuse it

  3. A situation in which a common resource is used efficiently because each individual user has an incentive to use it efficiently

  4. A situation in which a common resource is not used at all because each individual user has an incentive not to use it


Correct Option: A
Explanation:

The tragedy of the commons is a situation in which a common resource is overused because each individual user has an incentive to overuse it. This is because each individual user benefits from using the resource, but does not bear the full cost of their use. As a result, the resource is overused and eventually depleted.

What is the concept of sustainable development?

  1. A type of development that meets the needs of the present without compromising the ability of future generations to meet their own needs

  2. A type of development that maximizes economic growth without regard to environmental or social impacts

  3. A type of development that minimizes environmental impacts without regard to economic or social impacts

  4. A type of development that maximizes social welfare without regard to environmental or economic impacts


Correct Option: A
Explanation:

Sustainable development is a type of development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This means that sustainable development takes into account the environmental, social, and economic impacts of development and seeks to minimize negative impacts while maximizing positive impacts.

What is the concept of externalities?

  1. The costs or benefits that arise from a transaction between two parties but are not reflected in the price of the transaction

  2. The costs or benefits that arise from a transaction between two parties and are reflected in the price of the transaction

  3. The costs or benefits that arise from a transaction between two parties and are not reflected in the price of the transaction, but are borne by a third party

  4. The costs or benefits that arise from a transaction between two parties and are reflected in the price of the transaction, but are borne by a third party


Correct Option: A
Explanation:

Externalities are the costs or benefits that arise from a transaction between two parties but are not reflected in the price of the transaction. Externalities can be positive or negative. For example, a factory that pollutes the air imposes a negative externality on the people who live nearby. A park that provides recreation opportunities creates a positive externality for the people who live nearby.

What is the concept of market failure?

  1. A situation in which the market does not allocate resources efficiently

  2. A situation in which the market allocates resources efficiently

  3. A situation in which the market is not competitive

  4. A situation in which the market is competitive


Correct Option: A
Explanation:

Market failure is a situation in which the market does not allocate resources efficiently. This can occur for a number of reasons, including externalities, public goods, and imperfect information. When market failure occurs, the government may intervene to correct the market failure.

What is the concept of public goods?

  1. Goods that are non-rivalrous and non-excludable

  2. Goods that are rivalrous and non-excludable

  3. Goods that are non-rivalrous and excludable

  4. Goods that are rivalrous and excludable


Correct Option: A
Explanation:

Public goods are goods that are non-rivalrous and non-excludable. This means that they can be enjoyed by multiple people at the same time and it is difficult to exclude people from enjoying them. Examples of public goods include clean air, national defense, and public parks.

What is the concept of the prisoner's dilemma?

  1. A situation in which two or more individuals have an incentive to cooperate, but each individual is better off if they defect

  2. A situation in which two or more individuals have an incentive to defect, but each individual is better off if they cooperate

  3. A situation in which two or more individuals have an incentive to cooperate, and each individual is better off if they cooperate

  4. A situation in which two or more individuals have an incentive to defect, and each individual is better off if they defect


Correct Option: A
Explanation:

The prisoner's dilemma is a situation in which two or more individuals have an incentive to cooperate, but each individual is better off if they defect. This can lead to a situation in which all individuals defect, even though they would be better off if they all cooperated.

What is the concept of the tragedy of the commons?

  1. A situation in which a common resource is overused because each individual user has an incentive to overuse it

  2. A situation in which a common resource is underused because each individual user has an incentive to underuse it

  3. A situation in which a common resource is used efficiently because each individual user has an incentive to use it efficiently

  4. A situation in which a common resource is not used at all because each individual user has an incentive not to use it


Correct Option: A
Explanation:

The tragedy of the commons is a situation in which a common resource is overused because each individual user has an incentive to overuse it. This can lead to a situation in which the resource is depleted or destroyed.

What is the concept of the precautionary principle?

  1. A principle that states that when there is a threat of serious or irreversible damage to the environment, lack of full scientific certainty should not be used as a reason for postponing measures to prevent or minimize the damage

  2. A principle that states that when there is a threat of serious or irreversible damage to the environment, full scientific certainty is required before any measures can be taken to prevent or minimize the damage

  3. A principle that states that when there is a threat of serious or irreversible damage to the environment, the costs of preventing or minimizing the damage should be weighed against the benefits of doing so

  4. A principle that states that when there is a threat of serious or irreversible damage to the environment, the benefits of preventing or minimizing the damage should be weighed against the costs of doing so


Correct Option: A
Explanation:

The precautionary principle is a principle that states that when there is a threat of serious or irreversible damage to the environment, lack of full scientific certainty should not be used as a reason for postponing measures to prevent or minimize the damage.

What is the concept of the polluter pays principle?

  1. A principle that states that the polluter should bear the costs of pollution

  2. A principle that states that the government should bear the costs of pollution

  3. A principle that states that the victim of pollution should bear the costs of pollution

  4. A principle that states that no one should bear the costs of pollution


Correct Option: A
Explanation:

The polluter pays principle is a principle that states that the polluter should bear the costs of pollution. This principle is based on the idea that the polluter is responsible for the damage that they cause to the environment and that they should be held accountable for the costs of cleaning up the damage.

What is the concept of the extended producer responsibility principle?

  1. A principle that states that producers should be responsible for the entire life cycle of their products, including the end-of-life disposal

  2. A principle that states that producers should be responsible for the manufacturing of their products, but not for the end-of-life disposal

  3. A principle that states that producers should be responsible for the distribution of their products, but not for the manufacturing or end-of-life disposal

  4. A principle that states that producers should be responsible for the marketing of their products, but not for the manufacturing, distribution, or end-of-life disposal


Correct Option: A
Explanation:

The extended producer responsibility principle is a principle that states that producers should be responsible for the entire life cycle of their products, including the end-of-life disposal. This principle is based on the idea that producers are responsible for the environmental impacts of their products throughout their entire life cycle and that they should be held accountable for the costs of cleaning up the damage that their products cause to the environment.

What is the concept of the circular economy?

  1. An economic model that aims to eliminate waste and pollution by designing products and processes that can be reused, repaired, and recycled

  2. An economic model that aims to maximize economic growth without regard to environmental or social impacts

  3. An economic model that aims to minimize environmental impacts without regard to economic or social impacts

  4. An economic model that aims to maximize social welfare without regard to environmental or economic impacts


Correct Option: A
Explanation:

The circular economy is an economic model that aims to eliminate waste and pollution by designing products and processes that can be reused, repaired, and recycled. The circular economy is based on the idea that resources are finite and that we need to find ways to use them more efficiently. The circular economy also aims to reduce the environmental impacts of economic activity by designing products and processes that are less harmful to the environment.

- Hide questions