Econ 2100 Exam 2 with precise detailed answers ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Terms in this set (56) ||\\//|| ||\\//|| ||\\//|| ||\\//||
Original
Installing an air purifier is an example of ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
averting expenditure ||\\//||
The damage function method estimates all aspects of incremental benefits
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
False
The ____ method measures benefits based on a technical relationship between an
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
environmental contaminant and its observed damage. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
damage function ||\\//||
Under the ____ method, a good or service can be valued for characteristics it possesses.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
hedonic price ||\\//||
The market price of a house depends on several attributes including the environmental
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
quality around the house. Thus, environmental quality has a ____. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
implicit price ||\\//||
To estimate the incremental benefits of an environmental program, the travel cost method is
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
adopted with the following pre and post recreational inverse demand functions ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Pre policy: P = 32 - 0.02V1 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Post policy: P = 80 - 0.02V2 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
where V is the number of visitors and P is the admission fee. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If the admission fee is $20 per visitor and the number of pre and post policy visitors, V1 and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
V2, respectively, are
||\\//|| ||\\//|| ||\\//||
600, 3000 ||\\//||
If an individual derives utility from the preservation of an endangered species. This is an
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
example of ___ of the species. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
existence value ||\\//||
, ____ method uses changes in spending on goods that are substitutes for environmental
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
quality to measure willingness to pay. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Averting Expenditure ||\\//||
To estimate the incremental benefits of an environmental program, the travel cost method is
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
adopted with the following inverse pre and post- recreational demand functions ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Pre policy: P = 32 - 0.02V1 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Post policy: P = 80 - 0.02V2 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
where P is the number of visitors and V is the admission fee. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If the admission fee is $20 per visitor, and the number of pre- and post- policy visitors are V1
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and V2, respectively, the change in consumer surplus as a result of the program is $___.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
86,400
____ costs provide a more accurate measure of resource utilization.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Economic
Suppose the accounting cost of an environmental policy is $100 and the implicit costs are ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
$400. Then $___ is an accurate measure of resource utilization associated with this policy.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
500
____ cost does not vary based on the amount of abatement.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Capital
Suppose the total social cost of abatement is given as TSC = 0.4A^2 + 12A where A is the ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
level of abatement in units. ||\\//|| ||\\//|| ||\\//|| ||\\//||
As a result of an environmental policy, if the level of abatement is increased from 50 to 60
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
units, the incremental cost of abatement is $___. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
560
The incremental cost of a policy is the difference between the total social cost after the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
policy and the total social cost before the policy. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
True
_____ environmental cost is rarely captured in analyses. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Implicit
Consider the market for an ozone depleting substance where the market demand and supply ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
equations, respectively are as follows
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Qd=20-1.5P
Terms in this set (56) ||\\//|| ||\\//|| ||\\//|| ||\\//||
Original
Installing an air purifier is an example of ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
averting expenditure ||\\//||
The damage function method estimates all aspects of incremental benefits
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
False
The ____ method measures benefits based on a technical relationship between an
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
environmental contaminant and its observed damage. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
damage function ||\\//||
Under the ____ method, a good or service can be valued for characteristics it possesses.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
hedonic price ||\\//||
The market price of a house depends on several attributes including the environmental
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
quality around the house. Thus, environmental quality has a ____. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
implicit price ||\\//||
To estimate the incremental benefits of an environmental program, the travel cost method is
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
adopted with the following pre and post recreational inverse demand functions ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Pre policy: P = 32 - 0.02V1 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Post policy: P = 80 - 0.02V2 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
where V is the number of visitors and P is the admission fee. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If the admission fee is $20 per visitor and the number of pre and post policy visitors, V1 and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
V2, respectively, are
||\\//|| ||\\//|| ||\\//||
600, 3000 ||\\//||
If an individual derives utility from the preservation of an endangered species. This is an
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
example of ___ of the species. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
existence value ||\\//||
, ____ method uses changes in spending on goods that are substitutes for environmental
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
quality to measure willingness to pay. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Averting Expenditure ||\\//||
To estimate the incremental benefits of an environmental program, the travel cost method is
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
adopted with the following inverse pre and post- recreational demand functions ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Pre policy: P = 32 - 0.02V1 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Post policy: P = 80 - 0.02V2 ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
where P is the number of visitors and V is the admission fee. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If the admission fee is $20 per visitor, and the number of pre- and post- policy visitors are V1
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and V2, respectively, the change in consumer surplus as a result of the program is $___.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
86,400
____ costs provide a more accurate measure of resource utilization.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Economic
Suppose the accounting cost of an environmental policy is $100 and the implicit costs are ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
$400. Then $___ is an accurate measure of resource utilization associated with this policy.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
500
____ cost does not vary based on the amount of abatement.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Capital
Suppose the total social cost of abatement is given as TSC = 0.4A^2 + 12A where A is the ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
level of abatement in units. ||\\//|| ||\\//|| ||\\//|| ||\\//||
As a result of an environmental policy, if the level of abatement is increased from 50 to 60
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
units, the incremental cost of abatement is $___. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
560
The incremental cost of a policy is the difference between the total social cost after the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
policy and the total social cost before the policy. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
True
_____ environmental cost is rarely captured in analyses. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Implicit
Consider the market for an ozone depleting substance where the market demand and supply ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
equations, respectively are as follows
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Qd=20-1.5P
