ECON2100
Dinkar Exam 2-3
with complete
verified
solutions
The most commonly used market based instrument to control pollution,
internationally, is a - answer Pollution Charge
For a Pigouvian tax to be effective, the unit tax must be equal to marginal
external cost at the socially efficient output level. - answer True
In a deposit-refund system, the deposit makes the polluter internalize the
externality caused by improper waste disposal by absorbing the cost of any
damage it might generate in advance. - answer True
According to the cost-effective abatement criterion, all polluting sources
would abate pollution up to the point where their individual total abatement
cost (TAC) levels were equal. - answer False
Suppose a firm faces an emission charge implemented as a marginal tax
(MT) of 12 and that its MAC = 0.6A. Calculate the abatement level (A) (use
, only whole numbers, no decimals) at which the firm would be indifferent
between paying a tax and abatement. - answer 20
A pollution charge can be implemented as an emission charge. - answer True
In a cap and trade system with two polluters with different costs of marginal
abatement (MAC), the high cost polluter will buy (identify the strict condition)
a permit from the low cost polluter as long as - answer price charged by the
low cost polluter is lower than the MAC of high cost polluter.
Market-based instruments are a secondary form of control when it comes to
environmental problems. - answer True
Climate change ____ due to human activities. - answer Might Be
The most likely explanation agreed on by scientists as the cause of ozone
depletion is - answer chlorofluorocarbons
The production of ozone depleting substances can be modeled as a negative
externality. - answer True
A controversy in the climate change debate is the predicted response to
increased production of greenhouse gases. - answer True
Which of the following pollution charges have been commonly proposed to
tackle carbon dioxide emissions. - answer Gasoline tax, carbon tax and Btu
tax
In the US market for chlorofluorocarbons (CFCs), the phaseout of CFCs lead
to ___ in the price of CFCs. - answer An increase
Dinkar Exam 2-3
with complete
verified
solutions
The most commonly used market based instrument to control pollution,
internationally, is a - answer Pollution Charge
For a Pigouvian tax to be effective, the unit tax must be equal to marginal
external cost at the socially efficient output level. - answer True
In a deposit-refund system, the deposit makes the polluter internalize the
externality caused by improper waste disposal by absorbing the cost of any
damage it might generate in advance. - answer True
According to the cost-effective abatement criterion, all polluting sources
would abate pollution up to the point where their individual total abatement
cost (TAC) levels were equal. - answer False
Suppose a firm faces an emission charge implemented as a marginal tax
(MT) of 12 and that its MAC = 0.6A. Calculate the abatement level (A) (use
, only whole numbers, no decimals) at which the firm would be indifferent
between paying a tax and abatement. - answer 20
A pollution charge can be implemented as an emission charge. - answer True
In a cap and trade system with two polluters with different costs of marginal
abatement (MAC), the high cost polluter will buy (identify the strict condition)
a permit from the low cost polluter as long as - answer price charged by the
low cost polluter is lower than the MAC of high cost polluter.
Market-based instruments are a secondary form of control when it comes to
environmental problems. - answer True
Climate change ____ due to human activities. - answer Might Be
The most likely explanation agreed on by scientists as the cause of ozone
depletion is - answer chlorofluorocarbons
The production of ozone depleting substances can be modeled as a negative
externality. - answer True
A controversy in the climate change debate is the predicted response to
increased production of greenhouse gases. - answer True
Which of the following pollution charges have been commonly proposed to
tackle carbon dioxide emissions. - answer Gasoline tax, carbon tax and Btu
tax
In the US market for chlorofluorocarbons (CFCs), the phaseout of CFCs lead
to ___ in the price of CFCs. - answer An increase
