Question 1

The production of smoke as a pollutant is a failure of the market system.

Accepted Answer

When producers release smoke into the environment, they are not held responsible for the cost of the pollution they create. This is an example of a negative externality, where the cost of an activity is borne by someone other than the producer or consumer. In a well-functioning market system, prices would reflect the true cost of production, including the cost of pollution. However, the failure to account for externalities is a common feature of many markets, especially in the absence of regulation or other corrective measures.

Question 2

In the last three decades, air quality in American cities has improved.

Accepted Answer

The Clean Air Act and other regulations have helped reduce air pollution in urban areas, leading to improved air quality over the past 30 years. However, there is still work to be done, particularly in addressing the impacts of climate change on air quality.

Question 3

The opportunity cost of a completely clean environment is not worth the price for most people.

Accepted Answer

While a completely clean environment may seem desirable, the cost of achieving it in terms of time, money, and resources would outweigh the benefits for most people. Additionally, some level of pollution is inevitable in modern society, and completely eliminating it would require such a massive overhaul of our way of life that it simply isn't feasible. People generally accept a certain level of environmental degradation in exchange for the benefits of modern technology and industry.

Question 4

Environmental problems occur exclusively in capitalist economies.

Accepted Answer

Environmental problems exist in various economic systems and are not exclusive to capitalism. For example, pollution and deforestation have occurred in socialist and communist countries as well. The root cause of environmental problems is not the economic system, but rather human activities and unsustainable practices.

Question 5

Increasing GDP generally causes increases in problems of waste disposal.

Accepted Answer

As GDP increases, so does consumption and production, which leads to an increase in waste. This can lead to environmental problems such as landfills filling up and pollution from waste disposal methods.

Question 6

Pollution is a relatively new phenomenon.

Accepted Answer

Pollution has been present since the earliest civilizations, with evidence of air and water pollution dating back thousands of years. However, the severity and widespread nature of pollution as we know it today is a relatively modern issue.

Question 7

Recycling rates for aluminum, paper, and glass have been increasing in the United States.

Accepted Answer

Over the past few decades, there has been a significant increase in recycling rates for aluminum, paper, and glass in the United States. For example, the aluminum beverage can recycling rate was 50.4% in 1990 and reached 49.8 billion cans recycled in 2017, which is a rate of 63.5%. Paper and cardboard recycling rates have also increased, from around 33% in 1990 to about 66.2% in 2017. Similarly, glass recycling rates have increased from around 20% to about 33% in the same time period. These increases can be attributed to better recycling infrastructure, consumer awareness, and education campaigns.

Question 8

Economists believe it is feasible and desirable to reduce environmental damage to zero.

Accepted Answer

Most economists recognize that while reducing environmental damage is crucial, reducing it to zero is neither feasible nor desirable due to the immense economic costs and practical limitations involved. They often advocate for a balance between environmental protection and economic growth.

Question 9

Centrally planned economies like China produce relatively little pollution.

Accepted Answer

This statement is false. Historically, centrally planned economies like China did produce a significant amount of pollution due to the lack of environmental regulations and the emphasis on rapid industrialization. However, in recent years, China has made efforts to address its pollution problems through increased environmental regulations and investment in renewable energy sources.

Question 10

Externalities are benefits or damages conferred upon people who are directly involved in an exchange of a good or service.

Accepted Answer

Externalities are benefits or damages that are conferred upon people who are not directly involved in an exchange of a good or service, but rather are affected by it.

Question 11

Environmental destruction is peculiar to centrally planned economies.

Accepted Answer

Environmental destruction can occur in any type of economic system, not just centrally planned economies. Capitalist economies also have a history of environmental destruction and exploitation of natural resources.

Question 12

If not recycled, an input used in production ultimately winds up as a waste product.

Accepted Answer

If an input used in production is not recycled or repurposed, it will eventually become a waste product that needs to be disposed of.

Question 13

The "edifice complex" is based on the idea that bigger is better.

Accepted Answer

The "edifice complex" refers to the tendency of some individuals or organizations to believe that the size and grandeur of buildings or structures is a measure of success or prestige. Therefore, bigger is seen as better.

Question 14

Externalities can create a threat to environmental quality.

Accepted Answer

Externalities are costs or benefits that are not accounted for by those who create or consume them. When the cost of a pollution or other negative impact is not paid by the person or company causing the harm, it creates a threat to the environment and can result in degradation of natural resources, negative health effects, and other environmental problems.

Question 15

The pricing system has a failure built into it when externalities exist.

Accepted Answer

When externalities exist, the costs or benefits of a transaction are not reflected in the market price, leading to an inefficient allocation of resources. This is known as market failure.

Question 16

Pollution is an example of a negative externality.

Accepted Answer

Pollution is an example of a negative externality because it causes harm to individuals or society as a whole, without the polluter bearing the full cost of those negative impacts.

Question 17

Basic supply and demand analysis can be used to explain how externalities lead to environmental problems.

Accepted Answer

Externalities are costs or benefits that are not reflected in the market price of a good or service. When a good or service creates negative externalities (such as pollution), the supply curve shifts to the right, leading to an overproduction of the good and a market failure. Similarly, positive externalities can lead to an underproduction of a good. Therefore, understanding the basic principles of supply and demand can help explain how externalities contribute to environmental problems.

Question 18

Increasing environmental awareness in the United States has occurred with increasing GDP, which has reduced concerns about basic needs.

Accepted Answer

Studies have shown that as a nation's GDP increases, its citizens become more aware of environmental issues and begin to prioritize them over basic needs. This phenomenon is known as the "environmental Kuznets curve."

Question 19

Individuals and government have been contributors in harming the environment.

Accepted Answer

Both individuals and governments have been responsible for activities that harm the environment, such as pollution, deforestation, and overuse of natural resources, among others.

Question 20

Economists believe that the goal of environmental policy should be zero pollution.

Accepted Answer

The answer of Economists believe that the goal of environmental...

Quiz 17: Externalities, the Environment, and Natural Resources