,CHAPTER 1
The Role of Economics in Environmental Management
TRUE-FALSE
1. In the Circular Flow Model, money flows are disregarded.
Answer: F
2. Within the Circular Flow Model, households are assumed to be the owners of all factors
of production, including the natural resources.
Answer: T
3. Residuals are by-products, or pollution, left in the environment after a technological or
natural process as occurred.
Answer: T
4. The discipline concerned with the resource flow from economic activity back to nature is
known as natural resource economics.
Answer: F
5. According to the first law of thermodynamics, matter and energy can be destroyed but
not created.
Answer: F
6. Nature’s capacity to convert matter and energy is limitless.
Answer: F
7. According to BMW Group, plastics are among the simplest materials to recycle.
Answer: F
8. Natural pollutants are those linked to human activity.
Answer: F
9. Chemical wastes associated with the manufacturer of solvents are anthropogenic
pollutants.
Answer: T
10. An airplane is a point source of pollution.
Answer: T
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,11. Runoff from urban streets is an example of nonpoint source pollution.
Answer: T
12. Since acidic deposition arises around the world, it is considered to be global pollution.
Answer: F
13. The warmer temperatures in the Gulf of Mexico may have increased the magnitude and
extent of the damages linked to the Gulf oil spill in 2010.
Answer: F
14. When scientists first identified the ‘ozone hole’ over the Antarctic region in the 1980s, it
was less than 10 miles in diameter.
Answer: F
15. Concern for managing natural resources to ensure their quality and abundance for future
generations is called sustainable development.
Answer: T
16. Proponents of an environmentally adjusted measure of national income believe that
environmental pollution linked to production should be recorded as a loss in the system
of national accounts (SNA).
Answer: T
17. Improvements made to China’s environment in preparation for the Olympic Games in
2008 have been maintained and even enhanced over time.
Answer: F
18. The economic criteria concerned with minimizing resource use to achieve an objective is
known as allocative efficiency.
Answer: F
19. Setting an air quality standard is an example of a command and control approach to
improving the environment.
Answer: T
20. A tax imposed on emissions is an example of the market approach to pollution control.
Answer: T
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, MULTIPLE CHOICE
1. The materials balance model
a. captures only environmental pollution
b. explicitly illustrates both the flow of resources and the flow of residuals
c. illustrates both the money and real flows
d. all of the above
e. (b) and (c) only
Answer: e.
2. According to the materials balance model
a. recycling permanently eliminates residuals
b. only production can damage the environment
c. residuals arise from both consumption and production
d. only households undertake recycling and reuse
Answer: c.
3. Environmental economics
a. is concerned mainly with the residual flow from economic activity back to nature
b. focuses on the flow of resources from nature to economic activity
c. recognizes that the flow of residuals back to nature is preventable
d. none of the above
Answer: a.
4. Recycling efforts such as those exemplified by BMW's Design for Disassembly (DFD)
program
a. permanently diminish the flow of residuals back to nature
b. are not represented in the materials balance model
c. represent short-term conversion of residuals into recycled materials or goods
d. reduce the amount of wastes returned to nature in the long-run
Answer: c.
5. According to the second law of thermodynamics
a. matter and energy can be neither created nor destroyed
b. nature’s capacity to convert matter and energy is limited
c. nothing is lost in the conversion of materials from economic activity into other forms of
matter and energy
d. all of the above
e. none of the above
Answer: b.
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The Role of Economics in Environmental Management
TRUE-FALSE
1. In the Circular Flow Model, money flows are disregarded.
Answer: F
2. Within the Circular Flow Model, households are assumed to be the owners of all factors
of production, including the natural resources.
Answer: T
3. Residuals are by-products, or pollution, left in the environment after a technological or
natural process as occurred.
Answer: T
4. The discipline concerned with the resource flow from economic activity back to nature is
known as natural resource economics.
Answer: F
5. According to the first law of thermodynamics, matter and energy can be destroyed but
not created.
Answer: F
6. Nature’s capacity to convert matter and energy is limitless.
Answer: F
7. According to BMW Group, plastics are among the simplest materials to recycle.
Answer: F
8. Natural pollutants are those linked to human activity.
Answer: F
9. Chemical wastes associated with the manufacturer of solvents are anthropogenic
pollutants.
Answer: T
10. An airplane is a point source of pollution.
Answer: T
© 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part,
except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use. Page 1-1
,11. Runoff from urban streets is an example of nonpoint source pollution.
Answer: T
12. Since acidic deposition arises around the world, it is considered to be global pollution.
Answer: F
13. The warmer temperatures in the Gulf of Mexico may have increased the magnitude and
extent of the damages linked to the Gulf oil spill in 2010.
Answer: F
14. When scientists first identified the ‘ozone hole’ over the Antarctic region in the 1980s, it
was less than 10 miles in diameter.
Answer: F
15. Concern for managing natural resources to ensure their quality and abundance for future
generations is called sustainable development.
Answer: T
16. Proponents of an environmentally adjusted measure of national income believe that
environmental pollution linked to production should be recorded as a loss in the system
of national accounts (SNA).
Answer: T
17. Improvements made to China’s environment in preparation for the Olympic Games in
2008 have been maintained and even enhanced over time.
Answer: F
18. The economic criteria concerned with minimizing resource use to achieve an objective is
known as allocative efficiency.
Answer: F
19. Setting an air quality standard is an example of a command and control approach to
improving the environment.
Answer: T
20. A tax imposed on emissions is an example of the market approach to pollution control.
Answer: T
© 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part,
except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use. Page 1-2
, MULTIPLE CHOICE
1. The materials balance model
a. captures only environmental pollution
b. explicitly illustrates both the flow of resources and the flow of residuals
c. illustrates both the money and real flows
d. all of the above
e. (b) and (c) only
Answer: e.
2. According to the materials balance model
a. recycling permanently eliminates residuals
b. only production can damage the environment
c. residuals arise from both consumption and production
d. only households undertake recycling and reuse
Answer: c.
3. Environmental economics
a. is concerned mainly with the residual flow from economic activity back to nature
b. focuses on the flow of resources from nature to economic activity
c. recognizes that the flow of residuals back to nature is preventable
d. none of the above
Answer: a.
4. Recycling efforts such as those exemplified by BMW's Design for Disassembly (DFD)
program
a. permanently diminish the flow of residuals back to nature
b. are not represented in the materials balance model
c. represent short-term conversion of residuals into recycled materials or goods
d. reduce the amount of wastes returned to nature in the long-run
Answer: c.
5. According to the second law of thermodynamics
a. matter and energy can be neither created nor destroyed
b. nature’s capacity to convert matter and energy is limited
c. nothing is lost in the conversion of materials from economic activity into other forms of
matter and energy
d. all of the above
e. none of the above
Answer: b.
© 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part,
except for use as permitted in a license distributed with a certain product or service or otherwise on a password-
protected website for classroom use. Page 1-3
