| 1. |
A function that converts utility levels for all members of society into a number, in such a way that the welfare function gives higher values for distributions of utility that are more socially desirable, and vice-versa is called |
A. |
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Individual Welfare Function |
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B. |
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Social Welfare Function |
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C. |
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Social Compensation Function |
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D. |
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Individual Compensation Function |
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| 2. |
With a monopolist in pollution production, if an emission fee is set equal to marginal damage, the monopolist will
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A. |
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Drive the fee down below the level of Pigovian fee and reduce emissions below the efficient level. |
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B. |
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drive the fee above the level of Pigovian fee and increase emission above the efficient level. |
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C. |
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Drive the fee above the level of Pigovian fee and reduce emissions below efficient level. |
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D. |
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Drive the fee below the level of Pigovian fee and increase emission above the efficient level. |
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| 3. |
Emissions - differentiated regulations treat ________ ; whereas Ambient - differentiated regulations treat_____________ |
A. |
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Emissions from different sources differently no matter where they come from; treat all emissions as the same no matter where they come from. |
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B. |
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Emissions from different sources differently based on their relative contribution to pollution levels; treat all emissions as the same no matter where they come from. |
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C. |
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All emissions as the same no matter where they come from; treat emissions from different sources differently based on their relative contribution to ambient pollution levels. |
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D. |
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None of the above. |
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| 4. |
If a Polluter has private costs about Marginal Savings from pollution, an emission fee will cause the Polluter to |
A. |
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Overstate Marginal Savings. |
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B. |
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Understate Marginal Savings. |
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C. |
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Overstate Marginal Damages. |
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D. |
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Understate Marginal Damages. |
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| 5. |
A properly constructed levy on ___________ ambient levels of pollution can induce the optimal level of emissions , even when those emissions are _______________ |
A. |
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Unobserved , Observed |
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B. |
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Observed , Unobserved |
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C. |
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Observed , Observed </ |
