Chapt 23

Chapter 23 Ecological Economics
1. Ecology and economy are both derived from the Greek word Oikos meaning
A. the study of something.
B. how things work.
C. relationships
D. environment.
E. household.
Answer: E
Question Classification: Knowledge
2. The economic theory that was originally focused on how the interests and values of individuals relate to larger
societal goals is the
A. political economic theory.
B. neoclassical economic theory.
C. classical economic theory.
D. social economic theory.
E. ecological economics theory.
Answer: C
3. In economic terms, demand is how much of something

A. people want.
B. people need.
C. people will buy at current prices.
D. is available on the market.
E. people will buy regardless of price.
Answer: C
4. In economic terms, supply is how much of something

A. people want.
B. people need.
C. people will buy at current prices.
D. is available on the market.
E. people will buy regardless of price.
Answer: D
5. A(n) ________ relationship exists between supply and demand. Therefore, when supply is high, demand is _____.
A. correlational, high
B. inverse, high
C. inverse, low
D. correlational, low
E. strong, high
Answer: C
Question Classification: Comprehension
Inc
rea
sin
g
pri
ce
e
c
d
Increasing quantity
6. On the classical supply-demand graph above, ________ is highest when prices are low.
A. demand
B. supply
C. market equilibrium
D. cost
E. quantity
Answer: A
Question Classification: Analysis
7. On the supply-demand graph above, market equilibrium is marked

A. a.
B. b.
C. c.
D. d.
E. e
Answer: C
Question Classification: Application
8. Using the supply-demand graph above, what happens as the price of a good or service increases?
A. the quantity of the good or service decreases.
B. the quantity of the good or service increases.
C. demand increases and supply falls.
D. demand falls and supply increases.
E. market equilibrium is finally reached and the demand increases.
Answer: D
9. Price inelasticity is when _________ while price elasticity is when __________.

A. prices cannot be negotiated, consumers can negotiate a price
B. consumers can negotiate a price, prices cannot be negotiated
C. the supply/demand curve is followed, consumers buy a product regardless of cost
D. consumers buy a product regardless of cost, the supply/demand curve is followed
E. prices change frequently, prices are relatively stable
Answer: D
10. Political economy theory incorporates ______ while neoclassical economic theory incorporates _________.
A. the issues of social structures and value systems, objectivity and scientific analysis
B. objectivity and scientific analysis, the issues of social structures and value systems
C. the value of social systems, the value of natural resources
D. birth and death rates, natural resources and social structures
E. objectivity and scientific analysis, supply and demand
Answer: A
11. Which of the following is not true with respect to natural resource economics?
A. Natural resource economics views ecological processes as factors outside the economic system.
B. The principles of thermodynamics and coevolution are incorporated into natural resource economics.
C. Natural resources are seen as abundant in natural resource economics.
D. Neoclassical economic theory is similar to natural resource economics.
E. All of these describe natural resource economics.
Answer: B
12. Ecological economics is different from the other economic theories because it recognizes the
A. scarcity of natural capital.
B. recycling of ecological processes and the scarcity of manufactured capital.
C. abundance of natural capital.
D. fragility of the human economy and power of ecological systems.
E. human economy as one part of a dynamic world system.
Answer: E
13. A steady-state economy would be marked by

A. high resource consumption, low volume, and low output.
B. high resource consumption, high volume, and high-quality output.
C. low resource consumption, high volume, and high-quality output.
D. low resource consumption, low volume, and high-quality output.
E. low resource consumption, low volume, and low-quality output.
Answer: D
14. Natural capital is that which is created by

A. industrial processes.
B. human labor.
C. natural Earth processes.
D. animal labor.
E. All of these are ways natural capital is created.
Answer: C
15. Which of the following is considered human capital?

A. timber
B. solar energy
C. technology such as hydroelectric power
D. buildings in a community
E. knowledge of history
Answer: E
16. Which of the following is considered social capital?

A. community organization
B. human experiences within a community
C. technology such as a water treatment plant in a community
D. buildings in a community
E. knowledge of a communitys history
Answer: A
17. _______ is an exhaustible resource.

A. Scientific technology
B. Hydroelectric power
C. Coal
D. Biomass
E. Solar energy
Answer: C
18. Renewable resources are those that

A. will not be exhausted.
B. will always renew themselves unless we destroy them.
C. can be renewed through intensive investments of capital and labor.
D. are intangible and inexhaustible.
E. are intangible and exhaustible.
Answer: B
19. Things like open space or beauty can be considered a resource because they are
A. valued by people.
B. essential for efficient production.
C. exhaustible.
D. expensive.
E. take time to find.
Answer: A
20. An example of an intangible resource is

A. solar energy.
B. satisfaction.
C. human labor.
D. capital.
E. extinct species.
Answer: B
21. The supply of a natural resource depends on its

A. availability in nature.
B. extraction costs.
C. susceptibility to competition.
D. location.
E. All of these.
Answer: E
22. Proven reserves of a mineral or fossil fuel resource are

A. predicted according to current theory.
B. mapped and recoverable at current prices and technology.
C. already recovered and available for sale.
D. identified but not mapped thoroughly.
E. accessible but not economical.
Answer: B
23. The price of natural gas doubles. What would happen to the quantity of the natural gas in a market system?
A. The quantity decreases because it is too expensive to produce.
B. The quantity increases because it is worthwhile to drill into lower quality fields.
C. The quantity increases because new natural gas is being created.
D. The quantity decreases because it is too expensive and people do not buy it.
E. The quantity stays the same because the price of a resource does not change the availability of that resource.
Answer: B
24. The management of a wild area by a group of indigenous people such as the management of wild rice beds, is an
example of
A. tragedy of the commons.
C. communal open access system.
B. free-rider system.
D. communal resource management system.
E. privatization.
Answer: D
25. The tragedy of the commons is based on a view that

A. communal systems can be sustained and promoted.
B. community members will attempt, without success, to sustain a resource for future generations.
C. only privatization or strict laws can overcome peoples selfish and greedy nature.
D. individuals will try to maximize gain for the group at a loss for the individual.
E. open access systems can be sustained and promoted.
Answer: C
26. Which of the following is an example of an open access system?

A. Cattle grazing on common woodlands and pastures in colonial New England.
B. Maine lobster fisheries.
C. Nearshore fisheries in many parts of the world.
D. Native American management of wild rice beds and hunting grounds.
E. None of these are examples of an open access system
Answer: A
27. Which of the following is an example of a communal property system?

A. Cattle grazing on common woodlands and pastures in colonial New England.
B. Maine lobster fishing.
C. Privatization of Native American reservations in the US.
D. Offshore fisheries in many parts of the world.
E. None of these are examples of a communal property system.
Answer: B
28. In a frontier economy, there is usually a relative abundance of __________ because of the inefficiency
______________.
A. social resources, in transportation
B. labor, and lack of experience of workers
C. capital (money), of the market economy at this first stage
D. technology, of the processes to research and develop new technology
E. natural resources, of the procedures for gaining access to resources
Answer: E
29. Pollution levels in frontier economies tend to be relatively low because

A. few natural resources are wasted.
B. recycling technology is used efficiently.
C. people are scattered thinly over a large area.
D. there is little resource use per person.
E. there is nothing to cause pollution.
Answer: C
a
P1
b
P2
Price
P3
Q1
Q2
Q3
Quantity
Error: Reference source not found
30. The graph above shows how __________ when economies develop.
A. quantity increases as prices rise
B. prices fall as quantities increase
C. prices and quantities fall simultaneously
D. quantities and prices increase simultaneously
E. quantities and prices naturally change through time
Answer: B
31. The price/quantity intersection marked a in the graph above represents a/an ________ economy.
A. developing
B. modern
C. elastic
D. frontier
E. developed
Answer: D
32. Which of the following is not an effective response to resource scarcity?

A. Substituting different materials for scarce ones.
B. Increasing efficiency.
C. Diverting capital (money) to conventional industries.
D. Increasing trade with other regions.
E. Recycling.
Answer: C
33. In Limits to Growth, the Club of Rome predicted that

A. steady-state economic systems were not viable.
B. sustained economic growth of most countries was likely for the near future.
C. predicting the future was impossible.

D. technology would help mitigate the effects of increased populations.
E. economic collapse is likely if we do not reduce population growth.
Answer: E
34. The computer models published in the 1972 Limits to Growth predicted _____ in the next century.
A. population stability
B. population and resource crashes
C. growth in both population and resources
D. an immediate decrease in pollution levels
E. an increase in industrial output
Answer: B
35. In response to criticisms of Limits to Growth, a computer model was published in Beyond the Limits that
A. predicted growth in both population and resources in the next century.
B. predicted an increase in resources in the next century.
C. includes technological progress and pollution abatement.
D. includes a lower rate of world population growth.
E. predicted a decrease in both population and resources in the next century.
Answer: C
36. To traditional economists, resources are most valuable

A. for their own sake.
B. if saved and used sparingly.
C. when preserved for the future.
D. when they are used now.
E. when they are treated as a commonly available resource.
Answer: D
37. Which of the following indicators is incorrectly matched with the factors it takes into account?
A. Gross National Product - goods and services purchased
B. Genuine Progress Indicator - the value of unpaid labor and natural resource depletion
C. Human Development Index - life expectancy and educational attainment
D. Gross Domestic Product economic activities within a nations borders
E. Gender Development Index - gender and natural resource depletion
Answer: E
38. The use of Gross National Products as an indicator of economic well-being

A. is criticized as an inaccurate measure of the quality of life.
B. reflects social welfare.
C. predicts ecological bankruptcy through recognition of decreased natural capital.
D. takes into account life expectancy.

E. does not take into account economic activity overseas.
Answer: A
39. Which of the following would not be counted as part of the Gross National Product?
A. A new car purchase by a corporation.
B. Installation of cable television by a company.
C. Home health care by a family member.
D. Government purchases.
E. Dental services for an individual.
Answer: D
40. The existence value of a grizzly bear in Alaska is highest for

A. a hunter who pays for the chance to shoot it.
B. a photographer who stalks and photographs it.
C. a tourist who might hope to see it one day.
D. a person who is proud that there are wild grizzlies in the US.
E. It is impossible to be sure which of these is correct.
Answer: E
41. In 1997, ecological economists put a price on the goods and services provided by natural systems. This estimated
annual value ranged from
A. $16-54 trillion
B. $16-54 billion
C. $16-54 million
D. $16-54 thousand
E. $1600 - $5400
Answer: A
Use the following scenario.

A large lending institution is evaluating the long-term pros and cons of building a hydroelectric dam in the Amazon
rainforest. First, the lending institution is identifying the appropriate factors and then quantifying them. The factors
include, but are not limited to the direct expenses of building the dam, the lost opportunities from placing a dam on
the river, and the profit from the dam. Also included is an analysis of who will be affected by the dam.
42. What is the name of the process the lending institution is going through in the scenario above?
A. A long-term analysis.
B. A supply-demand analysis.
C. A tangible-intangible cost analysis.
D. A benefit-need ratio analysis.
E. A cost-benefit analysis.
Answer: E
43. The analysis above

A. includes many subjective judgments.
B. is strictly an objective economic activity.
C. is straightforward because the factors are easily quantified.
D. is an excellent process to use when dealing with uncertainties like the effects on indigenous people.
E. ensures fairness to all people who are involved in the projects.
Answer: A
44. Which of the following factors would be most difficult to quantify in the analysis above?
A. Depreciation of equipment.
B. The health of workers.
C. Planning and consulting fees.
D. Future maintenance costs.
E. Labor costs.
Answer: B
45. Which of the following is not a major criticism of the type of analysis in the scenario?
A. People are willing to answer questions about how much they would spend to save the Amazon rainforest.
B. The quantification process compares the value of the lives of indigenous peoples lives with the lives of people in
the city who would be receiving the electricity.
C. The focus of this type of analysis would be mainly on the hydroelectric project rather than alternatives.
D. Monetary values are placed on intangible things like the river running freely.
E. These are all criticisms of this type of analysis.
Answer: A
46. An example of a market-based incentive for environmental protection would be

A. rigid laws outlawing pollution production.
B. fees placed on certain types or volumes of a pollutant.
C. fees charged to inventors of new control technologies.
D. setting prices for pollution according to consumer demand.
E. All of these are examples of market-based incentives for environmental protection.
Answer: B
47. The idea of discount rates is that a commodity is always

A. worth the same amount, unless you alter it.
B. going to be worth more in the future than today.
C. becoming obsolete.
D. worthless unless you have sold it.
E. worth more today than in the future.
Answer: E
48. The idea of intergenerational justice is that we should consider the resource needs of people
A. who are young or unborn.
B. who are aging.
C. in other countries.
D. of the past.
E. in all age generations.
Answer: A
49. When we purchase a product, the price we pay directly reflects the _____ cost of producing it. If the
manufacture of the product degrades the quality of air or water, then the costs of this pollution are termed _____
costs.
A. incidental, external
B. incidental, indirect
C. indirect, incidental
D. external, internal
E. internal, external
Answer: E
50. When a factory pollutes a river, the costs and losses that affect people downstream would be called
A. indirect costs.
B. external costs.
C. incidental costs.
D. internal costs.
E. social costs.
Answer: B
51. When the 1990 Clean Air Act put a price tag on volumes of pollution produced by manufacturers, Congress was
attempting to ____________ pollution costs.
A. eliminate
B. externalize
C. internalize
D. publicize
E. privatize
Answer: C
52. The function of the World Bank is to administer

A. small, local development grants.
B. small international grants.
C. savings for major global corporations.
D. small, local aid.
E. major international development aid.
Answer: E
53. Businesses are now willing to become green because

A. it improves their public image.
B. it immediately saves them money.
C. doing so is expensive but makes good advertising.
D. doing so improves their image and saves money in the end.
E. they need to obey laws and comply with government regulations.
Answer: D
54. Many businesses are exploring and adopting the design for the environment. Which of the following is not
associated with this approach?
A. Improving public relations about the business environmental policies.
B. The products of a process are resources for other processes.
C. Work within the limits of the current incoming amounts of solar energy.
D. Including an emphasis on the maintenance of cultural and biological diversity.
E. All of these are associated with adopting the design for the environment.
Answer: A
55. Environmental protection has been proven to __________ the number of available jobs because __________.
A. decrease, it limits the use of nonrenewable resources (as in the case of the logging industry)
B. increase, labor is usually substituted for natural resources (as in the case of recycling)
C. stabilize, the use of nonrenewable resources is stabilized and jobs are scarce anyway
D. decrease, it negatively affects economic growth
E. stabilize, it limits the use of nonrenewable resources (as in the case of the logging industry)
Answer: B
56. Pollution charges and emissions trading are examples of market-based mechanisms for environmental
protection.
A. True
B. False
Answer: A
57. The Grammeen Bank is a microlender whose business loans average under $100 with a recovery rate of almost
100%.
A. True
B. False
Answer: A
58. The General Agreement on Tariffs and Trade (GATT) and the World trade Organization (WTO) agreements are
primarily negotiated among the largest industrial nations. This tends to keep less-developed countries in the role of
resource supplier to more developed countries.
A. True
B. False
Answer: A
59. In response to criticisms of World Bank policies, the U.S. Congress now insists that all loans for international
development be allocated to large projects rather than small ones.
A. True
B. False
Answer: B
60. What you choose to buy as a consumer does not really influence businesses to produce eco-friendly goods and
services.
A. True
B. False
Answer: B
Short Answer/Essay Questions

61. Draw a classic supply/demand curve (10 pts). Label the x axis, y axis (5 pts), and market equilibrium (5 pts).
62. Contrast the views and philosophies of the economist who believes that substitutes can be found for resources
with the ecologist who warns of limits to the amount of resources available.
Answer: For a total of 20 points (Note: The numbers can be changed to fit your assessment needs.)
20 =
Provided at least three accurate contrasts; Supported the contrasts with accurate evidence; Communicated
effectively with a well written summary
15 =
Provided at least two accurate contrasts; Supported the contrasts with accurate evidence; Communicated
with a fairly well written summary
10 =
Provided at least one contrast; Supported the contrast with evidence; Communicated with a fairly well
written summary
5=
Provided at least one accurate contrast; Supported the contrast with accurate evidence; Communicated with
a poorly written summary
0=
Provided at least one contrast; Did not support the contrast with accurate evidence; Communicated with a
very poorly written summary
63. Compare and contrast the views of Neo-Malthusians and Neo-Marxists.

Answer: For a total of 20 points (Note: The numbers can be changed to fit your assessment needs.)
20 =
15 =
10 =
5=
0=
Provided at least three accurate comparisons; Supported the comparisons with accurate evidence; Provided
at least three accurate contrasts; Supported the contrasts with accurate evidence; Communicated effectively
with a well written summary
Provided at least two accurate comparisons; Supported the comparisons with accurate evidence; Provided
at least two accurate contrasts; Supported the contrasts with accurate evidence; Communicated with a fairly
well written summary
Provided at least one accurate comparison; Supported the comparison with accurate evidence; Provided at
least one contrast; Supported the contrast with evidence; Communicated with a fairly well written summary
Provided at least one accurate comparison; Supported the comparison with accurate evidence OR Provided
at least one accurate contrast; Supported the contrast with accurate evidence AND Communicated with a
poorly written summary
Provided at least one comparison; Did not support the comparison with accurate evidence OR Provided at
least one contrast; Did not support the contrast with accurate evidence AND Communicated with a very
poorly written summary

Chapt 23

Uploaded by

Copyright:

Available Formats

Chapt 23

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapt 23

Uploaded by

Copyright:

Available Formats

Chapter 23 Ecological Economics

3. In economic terms, demand is how much of something

4. In economic terms, supply is how much of something

Question Classification: Comprehension

7. On the supply-demand graph above, market equilibrium is marked

9. Price inelasticity is when _________ while price elasticity is when __________.

13. A steady-state economy would be marked by

14. Natural capital is that which is created by

15. Which of the following is considered human capital?

16. Which of the following is considered social capital?

17. _______ is an exhaustible resource.

18. Renewable resources are those that

20. An example of an intangible resource is

21. The supply of a natural resource depends on its

22. Proven reserves of a mineral or fossil fuel resource are

25. The tragedy of the commons is based on a view that

26. Which of the following is an example of an open access system?

27. Which of the following is an example of a communal property system?

29. Pollution levels in frontier economies tend to be relatively low because

Error: Reference source not found

32. Which of the following is not an effective response to resource scarcity?

33. In Limits to Growth, the Club of Rome predicted that

C. predicting the future was impossible.

36. To traditional economists, resources are most valuable

38. The use of Gross National Products as an indicator of economic well-being

D. takes into account life expectancy.

40. The existence value of a grizzly bear in Alaska is highest for

Use the following scenario.

43. The analysis above

46. An example of a market-based incentive for environmental protection would be

47. The idea of discount rates is that a commodity is always

52. The function of the World Bank is to administer

Question Classification: Knowledge

53. Businesses are now willing to become green because

Short Answer/Essay Questions

63. Compare and contrast the views of Neo-Malthusians and Neo-Marxists.

You might also like

9. Price inelasticity is when _ while price elasticity is when __.