ECON 2100 - Test 2 - UGA
with complete verified
solutions
Which of the following is an example of a secondary environmental benefit? -
answer Higher worker productivity due to improved health.
If an individual enjoys swimming in the ocean, the ocean provides direct user
value to the individual. - answer True
If an individual receives utility from enjoying the view of a mountain range,
that mountain range is said to provide indirect user value to the individual. -
answer True
Vicarious consumption refers to the notion that - answer People gain utility
knowing that others receive gains from an environmental good.
The approach that estimates benefits according to a technical relationship
between a resource and a user of the resource is called the behavioral
linkage approach. - answer False
The contingent valuation method uses surveys about hypothetical market
conditions to estimate WTP for environmental quality. Which of the following
are a common drawback to using the survey approach? - answer - Survey
Participants may be unwilling to reveal WTP because of the free rider
problem.
- Survey participants may have difficulty assigning a dollar value to
environmental quality.
- Survey participants' WTP for an improvement in environmental quality can
differ from their WTA (willingness to accept) compensation for a reduction in
environmental quality.
(A,B, and C)
, The averting expenditure method estimates benefits as a the reduction in
spending on goods that are substitutes for a cleaner environment; whereas
the travel cost method estimates benefits as an increase in consumer
surplus in the market for a complement to environmental quality as policy
improves that quality. - answer True
A disadvantage of the travel cost method is - answer - It cannot determine
existence value
- It focuses on recreational use making it ineffective for commercial use
A hedonic price method uses regression analysis to obtain estimates of the
implicit prices of individual attributes, including environmental quality. The
hedonic price method requires complex empirical modeling, extensive data,
and variation across data points. - answer True
When implementing environmental policy, explicit costs include
administrative, monitoring, and enforcement expenses paid by the public
sector plus compliance costs paid by all economic sectors. - answer True
Variable spending arising as part of the operation and maintenance of
abatement processes is known as - answer Operating Costs
The value of reduced product variety due to an environmental policy
initiative or regulation is an example of an implicit cost - answer True
The time cost incurred by consumers who must find substitute products after
a ban is placed on some good or service is an example of a(n) - answer
implicit cost
Incremental Cost Assessment Involves - answer Subtracting baseline TSC
prior to undertaking policy from post-policy TSC
with complete verified
solutions
Which of the following is an example of a secondary environmental benefit? -
answer Higher worker productivity due to improved health.
If an individual enjoys swimming in the ocean, the ocean provides direct user
value to the individual. - answer True
If an individual receives utility from enjoying the view of a mountain range,
that mountain range is said to provide indirect user value to the individual. -
answer True
Vicarious consumption refers to the notion that - answer People gain utility
knowing that others receive gains from an environmental good.
The approach that estimates benefits according to a technical relationship
between a resource and a user of the resource is called the behavioral
linkage approach. - answer False
The contingent valuation method uses surveys about hypothetical market
conditions to estimate WTP for environmental quality. Which of the following
are a common drawback to using the survey approach? - answer - Survey
Participants may be unwilling to reveal WTP because of the free rider
problem.
- Survey participants may have difficulty assigning a dollar value to
environmental quality.
- Survey participants' WTP for an improvement in environmental quality can
differ from their WTA (willingness to accept) compensation for a reduction in
environmental quality.
(A,B, and C)
, The averting expenditure method estimates benefits as a the reduction in
spending on goods that are substitutes for a cleaner environment; whereas
the travel cost method estimates benefits as an increase in consumer
surplus in the market for a complement to environmental quality as policy
improves that quality. - answer True
A disadvantage of the travel cost method is - answer - It cannot determine
existence value
- It focuses on recreational use making it ineffective for commercial use
A hedonic price method uses regression analysis to obtain estimates of the
implicit prices of individual attributes, including environmental quality. The
hedonic price method requires complex empirical modeling, extensive data,
and variation across data points. - answer True
When implementing environmental policy, explicit costs include
administrative, monitoring, and enforcement expenses paid by the public
sector plus compliance costs paid by all economic sectors. - answer True
Variable spending arising as part of the operation and maintenance of
abatement processes is known as - answer Operating Costs
The value of reduced product variety due to an environmental policy
initiative or regulation is an example of an implicit cost - answer True
The time cost incurred by consumers who must find substitute products after
a ban is placed on some good or service is an example of a(n) - answer
implicit cost
Incremental Cost Assessment Involves - answer Subtracting baseline TSC
prior to undertaking policy from post-policy TSC
