ECON 2100 UGA Test 2 Exam Questions With
Correct Answers
Which |of |the |following |is |an |example |of |a |secondary |environmental |benefit? |- |CORRECT |
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. |(T/F) |- |CORRECT |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. |(T/F) |- |CORRECT |ANSWER✔✔-
true
Vicarious |consumption |refers |to |the |notion |that |- |CORRECT |ANSWER✔✔-people |gain |utility |
knowing |that |others |receive |gains |from |an |environmental |good
Physical |linkage |approach |- |CORRECT |ANSWER✔✔-Estimates |benefits |based |upon |a |technical |
relationship |between |environmental |resource |and |user |of |resource
Behavioral |linkage |approach |- |CORRECT |ANSWER✔✔-Estimates |benefits |using |observations |of |
behavior |in |actual |markets |or |survey |responses |about |hypothetical |markets
The |contingent |valuation |method |uses |surveys |about |hypothetical |market |conditions |to |
estimate |willingness |to |pay |(WTP) |for |environmental |quality. |Which |of |the |following |are |
common |drawbacks |to |using |a |survey |approach?
(a) |Survey |participants |may |be |unwilling |to |reveal |WTP |because |of |the |free |rider |problem.
, (b) |Survey |participants |may |have |difficulty |assigning |a |dollar |value |to |environmental |quality.
(c) |Survey |participants' |WTP |for |an |improvement |in |environmental |quality |can |differ |from |
their |WTA |(willingness |to |accept) |compensation |for |a |reduction |in |environmental |quality.
(d) |A |survey |approach |cannot |capture |existence |value.
All |of |the |above.
|
(a), |(b), |and |(c) |- |CORRECT |ANSWER✔✔-(a), |(b), |and |(c)
The |averting |expenditure |method |estimates |benefits |as |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. |(T/F) |- |CORRECT |ANSWER✔✔-true
A |disadvantage |of |the |travel |cost |method |is
(a) |it |cannot |determine |user |value |
(b) |it |cannot |determine |existence |value
(c) |it |focuses |on |recreational |use |making |it |ineffective |for |commercial |use
Correct Answers
Which |of |the |following |is |an |example |of |a |secondary |environmental |benefit? |- |CORRECT |
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. |(T/F) |- |CORRECT |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. |(T/F) |- |CORRECT |ANSWER✔✔-
true
Vicarious |consumption |refers |to |the |notion |that |- |CORRECT |ANSWER✔✔-people |gain |utility |
knowing |that |others |receive |gains |from |an |environmental |good
Physical |linkage |approach |- |CORRECT |ANSWER✔✔-Estimates |benefits |based |upon |a |technical |
relationship |between |environmental |resource |and |user |of |resource
Behavioral |linkage |approach |- |CORRECT |ANSWER✔✔-Estimates |benefits |using |observations |of |
behavior |in |actual |markets |or |survey |responses |about |hypothetical |markets
The |contingent |valuation |method |uses |surveys |about |hypothetical |market |conditions |to |
estimate |willingness |to |pay |(WTP) |for |environmental |quality. |Which |of |the |following |are |
common |drawbacks |to |using |a |survey |approach?
(a) |Survey |participants |may |be |unwilling |to |reveal |WTP |because |of |the |free |rider |problem.
, (b) |Survey |participants |may |have |difficulty |assigning |a |dollar |value |to |environmental |quality.
(c) |Survey |participants' |WTP |for |an |improvement |in |environmental |quality |can |differ |from |
their |WTA |(willingness |to |accept) |compensation |for |a |reduction |in |environmental |quality.
(d) |A |survey |approach |cannot |capture |existence |value.
All |of |the |above.
|
(a), |(b), |and |(c) |- |CORRECT |ANSWER✔✔-(a), |(b), |and |(c)
The |averting |expenditure |method |estimates |benefits |as |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. |(T/F) |- |CORRECT |ANSWER✔✔-true
A |disadvantage |of |the |travel |cost |method |is
(a) |it |cannot |determine |user |value |
(b) |it |cannot |determine |existence |value
(c) |it |focuses |on |recreational |use |making |it |ineffective |for |commercial |use
