Chapter 23

20 questions

1. Which of the following resources is used to produce goods and services as part of an economic system?

manufactured capital

natural capital

all of the choices

human capital

2. The point where the supplier's price matches what buyers are willing to pay for some quantity of a good or service is known as the

supply.

demand.

market equilibrium.

balance.

3. Which of the following events often occurs in today's capitalist market system without government interference?

Prices of goods and services accurately reflect true costs.

Buyers and sellers are always honest with one another.

All information about health or environmental dangers posed by products is readily revealed to consumers.

Companies lobby for government subsidies, tax breaks, or regulations.

4. Environmental economists argue that markets typically undervalue

manufactured capital.

business capital.

human capital.

natural capital.

5. The basic assumption of neoclassical economics is that there is no limit to ________ growth.

species

economic

population

exponential

6. According to neoclassical economists, ecological services have no economic value.

False

True

7. All of the following scenarios are examples of mitigation costs except for the

amount someone would pay to protect a beach.

cost to clean up a polluted lake.

expense of moving an endangered species to better habitat.

cost to protect a forest from cutting.

8. According to some critics, an extremely high discount rate will ________ exploitation of natural resources.

strongly encourage

slightly encourage

ignore

discourage

9. As a resource such as coal is removed from a mine, the costs for continuing to remove the remaining resource tend to

decrease slightly.

decrease sharply.

increase.

remain stable.

10. Weighing the pros and cons of a decision, and its impact on all parties, is accomplished with a(n)

optimal level study.

all of these choices.

cost-benefit analysis.

discount rate estimate.

11. Excluding indirect costs from a product or service can have all of the following impacts except

hindering the development of more environmentally beneficial goods and services.

promoting pollution, waste, and environmental degradation.

raising the cost of the product or service.

hiding harmful costs from consumers.

12. A method for measuring and comparing the economic outputs of nations without considering environmental or social impacts is the

happy planet index (HPI).

genuine progress indicator (GPI).

gross national happiness (GNH).

gross domestic product (GDP).

13. Full-cost pricing is not used more widely for all of the following reasons except

it is difficult to estimate many environmental and health costs.

many producers of harmful and wasteful products would have to charge less, decreasing their profits.

most consumers do not associate harmful environmental impacts with the goods and services they buy.

some producers of harmful products would go out of business.

14. Which of the following government practices would not encourage full-cost pricing by producers?

using tradable permits to reduce pollution and resource use

levying taxes on environmental harmful goods and services

increasing environmentally harmful subsidies

labeling environmentally friendly goods and services

15. To be successful, a tax shift to cover the harmful environmental and health costs of products and services would require which of the following?

immediate implementation

a decrease in salaries

a safety net for the poor and middle class

a net increase in overall taxes

16. Regulation is used for which of the following environmental issues?

environmental degradation prevention

all of the choices

pollution control

resource waste reduction

17. Innovative-friendly regulations are demonstrated by all of the following ideals except for

granting enough time for innovation.

developing green products and more jobs

allowing industries to meet goals in any way that works.

punishing companies who do not meet specified standards.

18. A service-flow economy is one where

products are sold and purchased.

both material use and pollution are high.

customers obtain a good or benefit by leasing or renting.

equipment is allowed to wear out, and is then disposed.

19. For many countries, budgets tend to emphasize

military spending over environmental or health issues.

environmental spending over military or health issues.

health spending over environmental or military issues.

environmental and health spending over military issues.

20. Which of the following principles does not describe a low-throughput economy?

producing less waste

controlling human population growth

using more energy

reusing, recycling, or composting more matter resources

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