KREFT G202 COMPREHENSIVE EXAMS
QUESTIONS AND ANSWERS SURE A+
✔✔Which of the following is not a reason for employing strategic sustainability efforts? -
✔✔To further differentiate your business model from the demands of green NGOs.
✔✔Consider a good that generates external damages. A competitive market that is left
un-regulated tends to - ✔✔charge a lower price than the price that would result in
maximized social welfare.
✔✔Which of the following is a correct statement regarding the pros and cons of Levi's
investing in the Screened Chemistry program first, before all others? - ✔✔The con of
Levi's investing first is the fact that its rivals can easily catch up to Levi's standards with
only minor processing fees.
✔✔When compared to the efficient output level, a firm that is polluting and not taking
into account its external costs will produce - ✔✔too many units, as some units produced
will have more social costs than social benefits.
✔✔According to the Levi's case, which of the following statements is true regarding the
ZDHC? - ✔✔Given its philosophy, member consensus is required before the ZDHC can
successfully scale out adoption of the Screen Chemistry approach.
✔✔Which of the following is not one of the incentive mechanisms used to steer
corporations toward more sustainable business practices? - ✔✔Taxes placed on the
development of green technology.
✔✔Which of the following best describes the consequences of the textile industry
strategically locating production facilities in areas with low regulations against toxins? -
✔✔Over-production leading to a net cost on society and potential environmental harm.
, ✔✔According to the Suncor case, which of the following is not a potential risk for
Suncor without the ICO2N network?
1) The emergence of new regulations encouraging CC&S technology implementation.
2) Activist campaigns that target RBC to cut off Suncor's funding for tar sands projects.
3) Renewable energy technology maturing faster and reaching cost parity with fossil fuel
energy.
4) Threats from governments to pass policies increasing the costs of dirty energy
sources. - ✔✔1) The emergence of new regulations encouraging CC&S technology
implementation.
✔✔Under a system of tradable pollution permits, the rule for a firm to follow when
deciding how much output to decrease from its profit maximizing output level, is for the
firm to cut its output as long as
1) marginal abatement costs are lower than the market price for pollution permits.
2) marginal external costs are lower than marginal private costs.
3) marginal abatement costs are lower than the marginal profit lost from cutting output.
4) the market price for pollution permits is higher than the marginal external costs. -
✔✔1) marginal abatement costs are lower than the market price for pollution permits.
✔✔You own a coal mining company, and at current production levels you have the
following estimated production figures: MPC= $60, MPB= $100, and MEC= $20. Your
production is heavily regulated by the US Environmental Protection Agency and you
have been given an initial allocation of tradable pollution permits freely to be able to
produce at your current production level (note that one pollution permit gives the right to
produce one unit of output). Which of the following permit prices listed below is the
highest price you would be willing to pay to buy one more pollution permit?
$30
$20
$60
$50 - ✔✔$30 but, why?
✔✔Which of the following is an incorrect statement regarding tradable pollution
permits?
1) Firms with high pollution levels can experience abatement cost savings under a
system of tradable pollution permits.
2) The pollution permits have value because there is a limited supply relative to
demand.
3) Firms with low pollution levels can experience profit gains under a system of tradable
pollution permits.
4) Environmental groups can not affect the overall level of pollution under a system of
tradable pollution permits. - ✔✔4) Environmental groups can not affect the overall level
of pollution under a system of tradable pollution permits.
✔✔According to the Suncor case update, has the ICO2N network made significant
investments in CC&S technology?
QUESTIONS AND ANSWERS SURE A+
✔✔Which of the following is not a reason for employing strategic sustainability efforts? -
✔✔To further differentiate your business model from the demands of green NGOs.
✔✔Consider a good that generates external damages. A competitive market that is left
un-regulated tends to - ✔✔charge a lower price than the price that would result in
maximized social welfare.
✔✔Which of the following is a correct statement regarding the pros and cons of Levi's
investing in the Screened Chemistry program first, before all others? - ✔✔The con of
Levi's investing first is the fact that its rivals can easily catch up to Levi's standards with
only minor processing fees.
✔✔When compared to the efficient output level, a firm that is polluting and not taking
into account its external costs will produce - ✔✔too many units, as some units produced
will have more social costs than social benefits.
✔✔According to the Levi's case, which of the following statements is true regarding the
ZDHC? - ✔✔Given its philosophy, member consensus is required before the ZDHC can
successfully scale out adoption of the Screen Chemistry approach.
✔✔Which of the following is not one of the incentive mechanisms used to steer
corporations toward more sustainable business practices? - ✔✔Taxes placed on the
development of green technology.
✔✔Which of the following best describes the consequences of the textile industry
strategically locating production facilities in areas with low regulations against toxins? -
✔✔Over-production leading to a net cost on society and potential environmental harm.
, ✔✔According to the Suncor case, which of the following is not a potential risk for
Suncor without the ICO2N network?
1) The emergence of new regulations encouraging CC&S technology implementation.
2) Activist campaigns that target RBC to cut off Suncor's funding for tar sands projects.
3) Renewable energy technology maturing faster and reaching cost parity with fossil fuel
energy.
4) Threats from governments to pass policies increasing the costs of dirty energy
sources. - ✔✔1) The emergence of new regulations encouraging CC&S technology
implementation.
✔✔Under a system of tradable pollution permits, the rule for a firm to follow when
deciding how much output to decrease from its profit maximizing output level, is for the
firm to cut its output as long as
1) marginal abatement costs are lower than the market price for pollution permits.
2) marginal external costs are lower than marginal private costs.
3) marginal abatement costs are lower than the marginal profit lost from cutting output.
4) the market price for pollution permits is higher than the marginal external costs. -
✔✔1) marginal abatement costs are lower than the market price for pollution permits.
✔✔You own a coal mining company, and at current production levels you have the
following estimated production figures: MPC= $60, MPB= $100, and MEC= $20. Your
production is heavily regulated by the US Environmental Protection Agency and you
have been given an initial allocation of tradable pollution permits freely to be able to
produce at your current production level (note that one pollution permit gives the right to
produce one unit of output). Which of the following permit prices listed below is the
highest price you would be willing to pay to buy one more pollution permit?
$30
$20
$60
$50 - ✔✔$30 but, why?
✔✔Which of the following is an incorrect statement regarding tradable pollution
permits?
1) Firms with high pollution levels can experience abatement cost savings under a
system of tradable pollution permits.
2) The pollution permits have value because there is a limited supply relative to
demand.
3) Firms with low pollution levels can experience profit gains under a system of tradable
pollution permits.
4) Environmental groups can not affect the overall level of pollution under a system of
tradable pollution permits. - ✔✔4) Environmental groups can not affect the overall level
of pollution under a system of tradable pollution permits.
✔✔According to the Suncor case update, has the ICO2N network made significant
investments in CC&S technology?
