Chapter 3 Quiz Questions

Question 1

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

Answer 1

They exclude participation of future generations.

Question 2

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

Answer 2

New York

Question 3

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

Answer 3

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

Question 4

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

Answer 4

both an increase in supply and a decrease in demand.

Question 5

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 in known as what?

Answer 5

cap and trade

Question 6

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

Answer 6

Jevons’ Paradox

Question 7

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

Answer 7

green consumption

Question 8

What is the purpose of using green taxes?

Answer 8

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

Question 9

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 9

cap and trade

Question 10

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

Answer 10

monopsony

Question 11

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

Answer 11

greenwashing

Question 12

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

Answer 12

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

Question 13

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

Answer 13

mediated by innovation.

Question 14

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

Answer 14

False

Question 15

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

Answer 15

Negative association with greenwashing

Question 16

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

Answer 16

banning indirect taxes on gasoline

Question 17

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 17

externalities

Question 18

Banking programs require significant regulatory intervention

Answer 18

True

Question 19

According to the Coase theorem, the key to controlling externalities is what?

Answer 19

contracts and bargaining

Question 20

he 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 logos or groups is NOT an actual green certification?

Answer 21

U.S. Green Housing Council

Question 22

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

Answer 22

market failures

Question 23

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

Answer 23

True

Question 24

Market-based solutions are always equitable

Answer 24

False

Question 25

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

Answer 25

True

Question 26

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

Answer 26

banking programs

Question 27

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

Answer 27

green taxes

Question 28

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

Answer 28

False

Question 29

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

Answer 29

Green products can never be green.

Question 30

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

Answer 30

green consumption