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ENVIS - Environmental Economics Centre - Quiz

 

 

 

         

Quiz 5

 

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. 

Individual Welfare Function

 B.  

Social Welfare Function

 C.  

Social Compensation Function

 D.  

Individual Compensation Function

    

2. With a monopolist in pollution production, if an emission fee is set equal to marginal damage, the monopolist will

 A. 

Drive the fee down below the level of Pigovian fee and reduce emissions below the efficient level.

 B.  

drive the fee above the level of Pigovian fee and increase emission above the efficient level.

 C.  

Drive the fee above the level of Pigovian fee and reduce emissions below efficient level.

 D.  

Drive the fee below the level of Pigovian fee and increase emission above the efficient level.

    

3. Emissions - differentiated regulations treat ________ ; whereas Ambient - differentiated regulations treat_____________

 A. 

Emissions from different sources differently no matter where they come from; treat all emissions as the same no matter where they come from.

 B.  

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.

 C.  

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.

 D.  

None of the above.

    

4. If a Polluter has private costs about Marginal Savings from pollution, an emission fee will cause the Polluter to

 A. 

Overstate Marginal Savings.

 B.  

Understate Marginal Savings.

 C.  

Overstate Marginal Damages.

 D.  

Understate Marginal Damages.

    

5. A properly constructed levy on ___________ ambient levels of pollution can induce the optimal level of emissions , even when those emissions are _______________

 A. 

Unobserved , Observed

 B.  

Observed , Unobserved

 C.  

Observed , Observed

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