Ch. 3 Markets and Commodities

Question 1

According to the market response model, innovations can lead to what?

Answer 1

Both an increase in supply and a decrease in demand.

Question 2

It is possible to include everyone in the bargaining process that might be affected by environmental problems.

Answer 2

False.

Question 3

What is the purpose of using green taxes?

Answer 3

To decrease the use of the item being taxed, and drive innovation and substitution for it.

Question 4

When you have one buyer for many sellers what is it called?

Answer 4

Monopsony.

Question 5

Which of the following is NOT a problem associated with the Coase Theorem and free-market environmentalism?

Answer 5

It relies on a growth population to create solutions for environmental problems.

Question 6

Banking programs require significant regulatory intervention.

Answer 6

True.

Question 7

Which of the following is NOT a problem with cap and trade policies?

Answer 7

A black market has been created to deal with environmental trading.

Question 8

More efficient use of a resource can lead to increased consumption of that resource.

Answer 8

True.

Question 9

The outcome of the wager between Ehrlich and Simon suggested that the effects of population growth on the environment are:

Answer 9

Mediated by innovation.

Question 10

Which of the following statements about market-based solutions is true?

Answer 10

They exclude participation of future generations.

Question 11

Which of the following is not a problem associated with green certification for companies?

Answer 11

Negative association with greenwashing.

Question 12

According to the Coase Theorem, they to controlling externalities is what?

Answer 12

Contracts and bargaining.

Question 13

Greenwashing is the attempt by corporations to accurately report their environmentally-friendly practices.

Answer 13

False.

Question 14

According to your notes, which of the following states has the highest gasoline tax rate.

Answer 14

New York.

Question 15

Consumer-driven environmental change can be achieved through which one of the following methods?

Answer 15

Green consumption.

Question 16

The type of market failure in which the costs or benefits of an activity to a third party are not figured into the activity’s cost is known as what?

Answer 16

Externalities.

Question 17

What term refers to what occurs when there is a mismatch between economic theory and the real-world?

Answer 17

Market failures.

Question 18

Which of the following logos or groups is NOT an actual green certification?

Answer 18

U.S. Green Housing Council.

Question 19

Which of the following relies on consumer demand to change environmental conditions?

Answer 19

Green consumption.

Question 20

The Coase Theorem:

Answer 20

States that optimal distribution of goods will occur as long as property rights are clearly defined.

Question 21

Which of the following is used to describe the observation that more efficient use of a resource can lead to greater environmental degradation?

Answer 21

Jevon’s Paradox.

Question 22

Many companies spend more on trying to make their products appear “greener” than actually being green.

Answer 22

True.

Question 23

If my factory installs super-efficient smokestacks that cause my air pollution emissions to drastically drop, I can take advantage of which program to make extra money?

Answer 23

Cap and trade.

Question 24

Market-based solutions are always equitable.

Answer 24

False.

Question 25

Wetland development in one place to make up for wetland destruction in another location is an example of what policy?

Answer 25

Banking programs.

Question 26

Which of the following is NOT a critique of market environmentalism?

Answer 26

Green products can never be green.

Question 27

Which of the following is NOT an example of market failure?

Answer 27

Greenwashing.

Question 28

Which of the following is NOT an example of a market solution that provides personal gain as well as environmental prosperity?

Answer 28

Green taxes.

Question 29

A market-based solution to environmental problems in which a pollution limit is set and permits to pollute may be bought and sold on a free market is known as what?

Answer 29

Cap and trade.

Question 30

Which of the following is NOT a market-based solution to environmental problems?

Answer 30

Banning indirect taxes on gasoline.