CHAPTER 20
MULTIPLE-CHOICE QUESTIONS
1.
Based on the Supply and Demand curve below, which of the following can be inferred?
I A lower price results in a greater demand
II A higher price results in a greater supply.
III Price changes as supply and demand fluctuate.
(a) I only
(b) II only
(c) III only
(d) I and II
(e) I, II, and III
2. All of the following are examples of negative externalities except
(a) global climate change as a result of greenhouse gas emissions from the burning of
coal, oil, and gasoline.
(b) increased pollination rates of surrounding crop plants as a result of local
beekeeping.
(c) a pulp mill that produces paper and pollutes the surrounding water and air.
(d) run-off of pesticides and fertilizers from a farm into a nearby river.
(e) acid deposition in the Adirondacks as a result of coal-burning power plants in the
Midwest.
3. The genuine progress indicator is a more representative measure of the wealth and well-being
of a country than the gross domestic product because the GPI
(a) measures productivity and consumption without taking externalities into account.
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(b) has risen in the United States while the GDP has remained fairly constant since
1970.
(c) includes resource depletion and pollution and health of the population in its
calculation.
(d) can be increased by higher health care costs and a greater incidence of illnesses.
(e) does not reflect personal consumption, income distribution, or levels of higher
education.
4. Economic assets are the sum total of which of the following?
I
Natural capital
II
Human capital
III
Manufactured capital
(a) II only
(b) III only
(c) I and II
(d) I and III
(e) I, II , and III
5. Valuation, according to environmental and ecological economics, would include all of the
following except
(a) the revenue generated from tourists visiting a national park.
(b) the cost of wastewater treatment provided by a natural wetlands.
(c) the benefits derived from medicinal plants found in tropical rainforests.
(d) the profits realized from hiring more employees to increase production.
(e) the cost of converting animal wastes into reusable organic matter by detritivores.
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6. Full cost pricing by the internalization of externalities could result in which of the following?
(a) Higher prices and a reduction in the consumption of items with high negative
impacts
(b) Lower prices and an increase in the consumption of items with high negative
impacts
(c) Greater consumer demand for products with high negative impacts
(d) Lower production costs due to diminishing natural resources
(e) Reduced production of environmentally friendly goods and services
7. Cradle-to-cradle and cradle-to-grave analyses of manufactured goods can best be described
as the study of the
(a) changes in the use of a product from one generation to the next.
(b) life cycle of a product from its production to use to ultimate disposal.
(c) use of resource extraction over the use of ecosystem services.
(d) options for the disposal of solid waste generated by the product.
(e) natural and human resources required for production.
8. Recently, the Los Angeles School District adopted a new policy on the use of pesticides in
schools. This policy assumes that the use of pesticides constitutes a risk to the health of
children and the environment. Pesticides will be employed only after nonchemical
methods have been explored. The pest control measure that is the least harmful will be
implemented. This is an example of
(a) the precautionary principle.
(b) ecosystem services.
(c) a market-driven approach.
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(d) sustainable use.
(e) full-cost pricing.
9. United Nations organizations that relate to the environment include which of the following?
(a) World Resources Institute (WRI)
(b) Occupational Safety and Health Administration (OSHA)
(c) Department of Energy (DOE)
(d) World Health Organization (WHO)
(e) Environmental Protection Agency (EPA)
10. Which of the following U.S. laws contributes to sustainability by governing the tracking and
disposal of solid and hazardous waste?
(a) National Environmental Policy Act (NEPA)
(b) Resource Conservation and Recovery Act (RCRA)
(c) Clean Water Act (CWA)
(d) Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA)
(e) Occupational Safety and Health Act (OSHA)
11. Strategies to implement environmental laws and regulations include all of the following
except
(a) standards for emission levels with fines when these levels are exceeded.
(b) green taxes on environmentally harmful activities or emissions.
(c) buying and selling of pollution permits.
(d) an incentive-based approach based on profits.
(e) banning the cap-and-trade practice.
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12. Harmful effects of poverty include which of the following?
(a) Decrease in unsanitary conditions
(b) Greater access to clean drinking water
(c) Increased overuse of the land
(d) Decreased malnutrition
(e) Lower infant mortality rates
13. The United Nations Millennium Declaration proposes to meet which of the following goals
by 2015?
I
Reduce environmental sustainability through economic development
II
Eliminate extreme poverty and hunger and reduce child mortality
III
Empower women and improve maternal health
(a) I only
(b) II only
(c) III only
(d) I and III
(e) II and III
14. The following is a summary report for the Distribution of Environmental Burdens for
Allegheny County in Pennsylvania.
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Population categories
Number of
facilities
emitting criteria
air pollutants
per square mile
Minorities
11
Whites
4.5
Low-income families
8
High-income families
3.9
Families below poverty
8.9
Families above poverty
4.1
Non–high school
6.9
graduates
High school graduates
4.7
Source: http://www.scorecard.org/community/ejsummary.tcl?fips_county_code=42003&lang=eng#map>
This is an example of
(a) an environmental justice issue.
(b) an anthropocentric worldview.
(c) a biocentric worldview.
(d) an ecocentric worldview.
(e) a stewardship school issue.
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FREE-RESPONSE QUESTIONS
1.
Use the following information to answer the questions that follow.
Gasoline consumption in the United States:

In 2008, the United States consumed approximately 138 billion gallons of gasoline.

The current federal tax on gasoline is 18.4 cents per gallon.

The national average cost of a gallon of regular unleaded gasoline in June 2008 was
$4.00 per gallon.

Eighty percent of the federal gasoline tax is used to subsidize road construction.
(a) Calculate the total amount of money spent in the United States on the retail purchase of
gasoline in 2008 (when gasoline was $4.00 per gallon). (2 points)
138,000,000,000 gallons of gasoline  $4.00 per gallon = $552,000,000,000
(b) i.
What percent of the cost per gallon is the gasoline tax?
$0.184 tax per gallon/$4.00 cost per gallon  100 = 4.60%
ii. How much revenue was generated by the gasoline tax in 2008?
138,000,000,000 gallons of gasoline  $0.184 tax per gallon = $25,392,000,000
2008 gasoline tax revenue
OR
0.046  $552,000,000,000 = $25,392,000,000 2008 gasoline tax revenue
iii. How much was used in 2008 to subsidize road construction? (3 points)
0.80  $25,392,000,000 = $20,313,600,000 spent to subsidize road construction
(c) Does the federal tax on gasoline qualify as a green tax? Explain your answer. (1 point)
No, the federal gasoline tax does not qualify as a green tax because it is primarily
used to subsidize road construction. This actually encourages more driving, which
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results in an increase in the generation of carbon dioxide and nitrous oxides.
Additionally, the natural habitats of the land are disrupted when the roadways are
constructed. A green tax by definition is an attempt to internalize these negative
externalities; the gasoline tax is not channeled to pay for mitigation of land use or
for the air pollution generated by driving.
(d) Advocates of raising the gasoline tax suggest that the tax be increased to 80 cents per
gallon. Identify two economic effects and two environmental effects of raising this tax.
(4 points)
Possible economic effects:
·
With an increase in gasoline prices due to an increased tax, consumers might use
less gasoline, thereby reducing the total annual revenues to the oil industry.
·
Reduced use by consumers also reduces the tax revenues and subsidies for road
construction, thereby reducing the number of people employed in road
construction and the materials purchased.
·
With an increase in gasoline prices due to an increased tax, consumers might be
inclined to purchase an automobile with a higher gas mileage; this could
economically increase the income of manufacturers of automobiles with higher
gas mileage and reduce the income of manufacturers of automobiles with lower
gas mileage.
·
An increase in gasoline prices due to an increased tax might encourage
consumers to use mass transit, therefore reducing the number of automobile
sales and services (if such alternatives are available).
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·
Increased costs may encourage the development of alternative fuels, thereby
reducing the profits of the oil industry and increasing the profits for alternative
energy companies.
·
If gasoline consumption is not reduced, then tax revenues would be increased as
would the subsidies for road construction.
This in turn would mean more
employment and more materials used for the ensuing road construction.
·
Such a tax tends to fall most heavily on individuals who are at the lowest ends of
the economic scale and those who must drive long distances to get to work,
shopping, etc.
Possible environmental effects:

An increase in gasoline prices due to an increased tax might encourage
consumers to drive less, resulting in a decrease in the levels of carbon dioxide
and nitrous oxide emissions.

An increase in gasoline prices due to an increased tax might result in greater use
of mass transit, thereby reducing automobile sales and the mining of raw
materials and the disruption of the land needed to produce them.

With fewer automobiles there would be fewer used cars entering the solid waste
stream.

An increase in gasoline prices due to an increased tax might encourage the
development of alternative fuels that would decrease greenhouse gas emissions
and reduce global warming. It might also increase the development of renewable
energy sources and means of transportation.
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
An increase in gasoline prices due to an increased tax might encourage
consumers to drive less, decreasing the amount of gasoline used. This in turn
might reduce the amount of oil drilling (offshore and otherwise) and the
resulting disruption of the land and sea.

The demand for gasoline at present is inelastic, so demand for more fuel-efficient
cars, hybrid-electric cars, and possibly electric cars may increase, but these have
environmental impacts as well.
2.
In 1997, economist Robert Costanza and his associates published a report titled The Value of
the World’s Ecosystem Services and Natural Capital. They estimated that if all the ecosystem
services provided worldwide had to be paid for, it would average $33 trillion per year with a
range from $16 trillion to $54 trillion. In that same year, the global Gross National Product
(GNP) was $18 trillion.
(a) What is meant by ecosystem or ecological services? Give three specific examples and
identify which United Nations organization might oversee these services. (4 points)
Ecological services are those services provided by ecosystems throughout the world
that benefit human beings either directly or indirectly.
(i)
Pollination by bees
(ii)
Soil adsorption and filtration of chemicals
(iii)
Detritivores turn animal waste into organic material used by primary
producers
*Ecological Service
**United Nations Organization
Soil formation
UNEP, UNDP
Recreation
WB
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Nutrient cycling
UNEP, UNDP
Water regulation and
UNEP, WB, WHO (clean drinking
supply
water), UNDP
Climate regulation
UNEP
(temperature and
precipitation)
Habitat
UNEP, WB
Flood and storm
UNEP, WB, UNDP
protection
Food and raw materials
WB, WHO (malnutrition), UNDP
Genetic resources
WB, WHO (food production),
UNDP
Atmospheric gas balance
UNEP
Pollination
WHO (food production), UNDP
*http://earthtrends.wri.org/features/view_feature.php?fid=15&theme=5
**United Nations Environment Program (UNEP)
World Bank (WB)
World Health Organization (WHO)
United Nations Development Program (UNDP)
(b) Define the term valuation. What would the worldwide consequences be if the world
actually had to pay for ecosystem services and natural capital? (2 points)
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Valuation is a method by which a monetary value is placed on intangible benefits and
natural capital and physical entities provided by nature.
Based on the above figures, the world could not afford these services; at the low end
of the cost range ($16 trillion), the world could afford them, but nothing else. Using the
average figure of $33 trillion, the world would amass a debt of $15 trillion ($33 trillion $18 trillion) per year for these services alone.
(c) Explain how this report could be used to develop a sustainable economic system. (2
points)
A sustainable economic system would rely more on ecosystem services and less on
resource extraction; it would also use more renewable energy sources, lessen negative
externalities, and reuse more of the products destined to enter the solid waste stream.
The details of this report would assist planners in identifying ecosystem services and
natural capital to achieve a sustainable economic system.
(d) Which Environmental Worldview is most consistent with environmental economics?
Explain. (2 points)
Environmental Economics addresses the failure of free market systems to allocate
resources efficiently to generate the welfare of the greatest number of people.
The Anthropocentric Worldview is most consistent with environmental economics
because it considers that human beings have intrinsic value and that nature has an
instrumental value to provide for our needs. It also recognizes that resource
depletion issues can be managed through technology and that at times nature
requires protection that can be provided through the government.
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MEASURING YOUR IMPACT
GDP and Footprints. The World Wide Fund for Nature (WWF) released the Report on
Ecological Footprint in China in June 2008. Answer the following questions using the data
below, which is based on this report.
Ecological
GDP per
footprint
capita
(global
(in
hectares/person
thousand
)
s U.S.
dollars)
1970
2000
% change 1970
2000
% change
China
0.7
1.5
+114%
0.1
1.2
+ 1,100%
India
0.7
0.7
0%
0.22
0.48
+118%
Japan
2.5
4.3
+72%
15
37
+147%
United
6.1
9.3
+52.5%
18
34
+89%
States
(a) Calculate the percentage change in ecological footprint and GDP for each country listed
and complete the table.
Ecological Footprint:
China: (1.5 – 0.7) / 0.7  100 = 114% increase
India: (0.7 – 0.7) / 0.7  100 = 0% change
Japan: (4.3 – 2.5) / 2.5  100 = 72% increase
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United States: (9.3 – 6.1)/ 6.1  100 = 52% increase
GDP:
China: (1.2 – 0.1)/ 0.1  100 = 1100% increase
India: (0.48 – 0.22)/ 0.22  100 = 120% increase
Japan: (37 – 15)/15  100 = 150% increase
United States: (34 – 18)/18  100 = 89% increase
(b) In the 30-year period cited in the data, what is the relationship between ecological
footprint and GDP?
Generally, both the Ecological Footprints and GDPs have increased over the 30-year
period, with GDP increasing at a greater rate.
(c) Discuss environmental equity using India as an example of a developing country and the
United States as an example of a developed country by comparing the ecological
footprints and GDPs for the year 2000.
Comparison of Ecological Footprint:
9.3 global hectares per person (United States)/ 0.7 global hectares per person (India)
= United States has 13.3 times larger Ecological Footprint than India
Therefore, the United States uses 13.3 times more resources per capita than India.
Comparison of GDP:
$34,000 GDP per capita United States / $480 GDP per capita India = GDP per
capita United States is 70.8 times greater than GDP per capita India
Therefore, a person in the United States is 70.8 times wealthier than a person in
India.
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Environmental equity involves the fair distribution of Earth resources. The
inequity demonstrated between India and the United States involves the inequitable
purchase of goods and services by a country that is more capable to do so.
(a) Based on your answer in (c), identify two goals of the United Nations’ Millennium
Declaration that would assist India in making its environmental inequities more equitable.
Since the comparison in (c) addressed resource consumption and wealth, the
following goals could apply:
·
Eradicate extreme poverty and hunger.
·
Achieve universal primary education (better education, better chance of
employment).
·
Promote gender equality and empower women (better chance for women to seek
employment).
·
Improve maternal health (healthier work force).
·
Combat HIV/AIDS, malaria, and other diseases (healthier work force).
·
Ensure environmental sustainability.
·
Develop a global partnership for development.
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