#1
What does the term 'negative externality' refer to in environmental economics?
Costs imposed on society from economic activities
ExplanationNegative externality involves societal costs from economic activities.
#2
Which of the following is an example of a negative externality?
A factory emitting pollutants into the air
ExplanationFactory emitting pollutants is a classic example of a negative externality.
#3
What is the difference between a negative externality and a positive externality?
Negative externality harms individuals while positive externality benefits them
ExplanationNegative externality harms, positive externality benefits individuals.
#4
What is the concept of 'cap and trade' in environmental policy?
A policy to impose a maximum limit on pollution emissions and allow trading of emission permits
ExplanationCap and trade: policy setting a pollution limit and allowing emission permit trading.
#5
What is the concept of 'environmental justice'?
Ensuring fair distribution of environmental benefits
ExplanationEnvironmental justice involves ensuring fair distribution of environmental benefits.
#6
What is a common economic solution to address negative externalities?
Taxing goods that produce negative externalities
ExplanationTaxing such goods is a common solution to tackle negative externalities.
#7
What is the Coase theorem in the context of environmental economics?
It states that private bargaining can solve externalities if property rights are well-defined
ExplanationCoase theorem asserts private bargaining can address externalities with clear property rights.
#8
What is the tragedy of the commons?
A situation where individuals overuse and deplete shared environmental resources
ExplanationTragedy of the commons: overuse and depletion of shared environmental resources.
#9
Which economic concept suggests that individuals may not have incentives to conserve resources due to lack of property rights?
Tragedy of the commons
ExplanationTragedy of the commons suggests a lack of property rights may deter resource conservation.
#10
What is the concept of marginal social cost in environmental economics?
The cost imposed on society by an additional unit of pollution
ExplanationMarginal social cost: the cost imposed on society by an additional unit of pollution.
#11
Which of the following is an example of a Pigovian tax?
A tax on carbon emissions
ExplanationTax on carbon emissions is an example of a Pigovian tax.
#12
What is an example of a policy instrument used to internalize externalities?
Tradable pollution permits
ExplanationTradable pollution permits are a policy instrument for internalizing externalities.
#13
Which economist introduced the concept of externalities?
Arthur Pigou
ExplanationArthur Pigou introduced the concept of externalities in economics.
#14
What is the free rider problem in environmental economics?
When individuals benefit from public goods without contributing to their cost
ExplanationFree rider problem: individuals benefit without contributing to the cost of public goods.
#15
Which of the following is an example of a common property resource?
Fisheries
ExplanationFisheries are an example of common property resources.