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Student:

9

1. If the marginal abatement cost of a policy is represented by: MAC = 1,400 - 5E, the total abatement cost

when the target level of emissions is 200 units equals

A. $400

B. $80,000

C. $32,000

D. $16,000

2. Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the idea

that

A. the polluter should pay

B. subsidies are politically unpalatable

C. subsidies can never be cost-effective

D. effluent taxes work better than subsidies

3. Policies that can be readily adapted to new information about damages, technological innovation and

4.

changing economic or social conditions are considered

A. morally superior

B. politically expedient

C. fair

D. flexible

The

A. political acceptability

B. fairness

C. cost-effectiveness

D. incentives to innovate

of a policy is not a criterion used to evaluate a pollution control policy.

5. A cost-effective policy is always socially efficient. True False

6. Enforcement costs are critical to the success of environmental programs and should be included in the

overall social costs of the program when evaluating different policy options. True False

7. Suppose the government is considering two alternative policies to achieve a target level of emissions for an industry of 500 tonnes. Option 1's approach is summarized by the marginal abatement cost curve:

MAC 1 = 800 - E 1 and Option 2's approach is summarized by the marginal abatement cost curve: MAC 2 =

400 - ½ E 2 . What is the total abatement cost of achieving the target emissions under each policy? Based

on this calculation, which of the two policies is the cost-effective choice?

8. Suppose the government is considering two alternative policies to achieve a target level of emissions for an industry of 2,000 tonnes. Option 1's approach is summarized by the marginal abatement cost curve:

MAC 1 = 2,200 - E 1 and Option 2's approach is summarized by the marginal abatement cost curve: MAC 2

= 2,750 - 1.25E 2 . What is the total abatement cost of achieving the target emissions under each policy?

Based on this calculation, which of the two policies is the cost-effective choice?

9 Key

1. If the marginal abatement cost of a policy is represented by: MAC = 1,400 - 5E, the total abatement

cost when the target level of emissions is 200 units equals

A.

$400

B.

$80,000

C.

$32,000

D.

$16,000

Accessibility: Keyboard Navigation Difficulty: Easy Field - Chapter 09 #1 Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.

2. Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the

idea that

A.

the polluter should pay

B.

subsidies are politically unpalatable

C.

subsidies can never be cost-effective

D.

effluent taxes work better than subsidies

Accessibility: Keyboard Navigation Difficulty: Moderate Field - Chapter 09 #2 Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.

3. Policies that can be readily adapted to new information about damages, technological innovation and

changing economic or social conditions are considered

A.

morally superior

B.

politically expedient

C.

fair

D.

flexible

Accessibility: Keyboard Navigation Difficulty: Easy Field - Chapter 09 #3 Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.

4.

The

of a policy is not a criterion used to evaluate a pollution control policy.

A.

political acceptability

B.

fairness

C.

cost-effectiveness

D.

incentives to innovate

Accessibility: Keyboard Navigation Difficulty: Easy Field - Chapter 09 #4 Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.

5. A cost-effective policy is always socially efficient. FALSE

If a cost-effective policy results in a level of emissions that differs from the socially efficient level of emissions then it is not socially efficient.

Accessibility: Keyboard Navigation Difficulty: Easy Field - Chapter 09 #5 Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.

6. Enforcement costs are critical to the success of environmental programs and should be included in the

overall social costs of the program when evaluating different policy options. TRUE

Accessibility: Keyboard Navigation Difficulty: Easy Field - Chapter 09 #6 Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.

7. Suppose the government is considering two alternative policies to achieve a target level of emissions for an industry of 500 tonnes. Option 1's approach is summarized by the marginal abatement cost curve: MAC 1 = 800 - E 1 and Option 2's approach is summarized by the marginal abatement cost

curve: MAC 2 = 400 - ½ E 2 . What is the total abatement cost of achieving the target emissions under

each policy? Based on this calculation, which of the two policies is the cost-effective choice?

For Option 1, the TAC 1 = ½(300×300) = $45,000. For Option 2, TAC 2 = ½(300×150) = $22,500. Option 2 is the cost-effective choice because it minimizes the total abatement cost of achieving the target level of emissions.

Difficulty: Easy Field - Chapter 09 #7 Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.

8. Suppose the government is considering two alternative policies to achieve a target level of emissions for an industry of 2,000 tonnes. Option 1's approach is summarized by the marginal abatement cost curve: MAC 1 = 2,200 - E 1 and Option 2's approach is summarized by the marginal abatement cost curve: MAC 2 = 2,750 - 1.25E 2 . What is the total abatement cost of achieving the target emissions under each policy? Based on this calculation, which of the two policies is the cost-effective choice?

For Option 1, the TAC 1 = ½(200×200) = $20,000. For Option 2, TAC 2 = ½(200×250) = $25,000. Option 1 is the cost-effective choice because it minimizes the total abatement cost of achieving the target level of emissions.

Difficulty: Easy Field - Chapter 09 #8 Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.

9 Summary

Category

# of Questions

Accessibility: Keyboard Navigation

6

Difficulty: Easy

7

Difficulty: Moderate

1

Field - Chapter 09

8

Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.

4

Learning Objective: 09- 02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.

4