ECN510 - Midterm review

Java Python ECN510 - Midterm review

1. An accidental oil spill is an example of a(n) emission while municipal treated waste is

an example of a(n) emission.

A episodic; continuous

B continuous; episodic

C global; local

D point source; non-point source

2. Suppose for a given market that the MWTP = 120 - Qd and MC = 20 + 3QS. Assuming all market and non-market values are incorporated into these equations, the MWTP at the

socially efficient level of output is equal to .

A 25 units

B 50 units

C $95

D $70

3. In the following figure the total cost of producing the 500th unit of output is

_______.

A $550

B $212,500

C $250,000

D $275,000

4. An environmental program is if the net effect of that policy has proportionally

effect on low-income people as on high-income people.

A proportional; less

B proportional; the same

C proportional; greater

D progressive; the same

5. When production results in environmental degradation, private firms do not take the

into consideration when making their output decisions resulting in .

A market failure; an externality

B external costs; a market failure

C ECN510 - Midterm review abatement costs; pollution

D market failure; social benefits

6. In the following figure, the uncontrolled level of

emissions is .

A 40

B 80

C 160

D impossible to determine from the information provided

7. Suppose the marginal abatement cost function is given as MAC =40-3E and the marginal damage function is given as MD =5E, where E is the total amount of emissions in thousand tonnes per month. What would be the socially efficient level of emissions?

A 5000 tonnes per month

B 2500 tonnes per month

C 1500 tonnes per month

D 1000 tonnes per month

8. If there is a negative externality for a given quantity of production, then

A Marginal Social Costs = Marginal Private Costs

B Marginal Social Costs < Marginal Private Costs

C Marginal Social Costs > Marginal Private Costs

D Marginal External Costs = Marginal WTP

9. In the following figure, the total damage cost of 25

units of emissions is equal to .

A $625

B $250

C $125

D $10

10. Suppose the marginal abatement cost function is given as MAC =100-E and the marginal

damage function is given as MD =E, where E is the total amount of emissions in per month