Chapter 12 Flashcards

1
Q

What is pollution considered?

A

Negative externality

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2
Q

What occurs when there is market failure?

A

Inefficient output

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3
Q

What are market-oriented environmental policies?

A

Create incentives for firms to reduce pollution.

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4
Q

What do permits allow firms to do regarding pollution?

A

Emit half as much pollution

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5
Q

When are marginal benefits of reducing pollution high?

A

Pollution is extensive

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6
Q

What agreement resulted from the Durban climate conference negotiations?

A

Paris Climate Agreement

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7
Q

What is included in social costs of production?

A

Private costs + external costs

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8
Q

What happens when social costs exceed social benefits?

A

Too much product produced

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9
Q

What are the three main categories of market-oriented approaches to pollution control?

A

Pollution charges, marketable permits, property rights

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10
Q

How is it difficult to assign a monetary value to environmental benefits?

A

Difficult to assign value to subjective or non-personal benefits

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11
Q

What does admitting to having an endangered species lead to?

A

Prohibits land use

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12
Q

What do command-and-control regulations require companies to install?

A

Anti-pollution equipment

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13
Q

What year was the Environmental Protection Agency (EPA) created?

A

1970

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14
Q

What is a common charge related to cars?

A

Gasoline taxes

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15
Q

Advantage of market-oriented environmental tools?

A

Lower cost for pollution reduction

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16
Q

How does forcing the firm to pay external costs affect production?

A

Increases costs, shifts supply up

17
Q

What is a major drawback of command-and-control regulation?

A

No incentive for improvement

18
Q

What approach offers greater promise than command-and-control?

A

Incentives and flexibility

19
Q

Why can’t nations solve environmental problems alone?

A

Global cooperation required

20
Q

What can you evaluate using the production possibility frontier?

A

Tradeoff between output and environment

21
Q

What are externalities?

A

Effects on third parties

22
Q

What is a characteristic of command-and-control regulation?

A

Inflexible standards

23
Q

What do governments in ecotourism regions do to encourage conservation?

A

Share revenues with local communities

24
Q

What is the opportunity cost of increased environmental protection?

A

Less economic output

25
How do externalities affect the supply curve?
Does not represent all social costs
26
What would happen if firms paid social costs of pollution?
Less pollution, higher prices
27
What will firms seek with a pollution tax?
Least expensive technologies