Answer the following statement(s) true (T) or false (F)
1. When using a damage function, incremental benefits are measured as a vertical distance of total damages (TD) associated with a decrease in some contaminant (C).
2. The averting expenditure approach is favored by researchers because it can capture both existence and user value.
3. The contingent valuation method is so called because it is contingent upon the hypothetical market that serves as the context for the survey.
4. The benefit estimation method that relies on goods that are complements to environmental quality is the averting expenditure method.
5. A known problem associated with the averting expenditure method is jointness of production, which refers togoods that provide services beyond those that improve the environment.
1. True
2. False
3. True
4. False
5. True
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Under a system of private property, could a 60-year-old owner of a tree farm benefit by planting and caring for
a. No, the farmer will be dead before the crop will be ready for harvest. b. No, the value of the farmer's land will decline since he is taking it out of production for the next 50 years. c. Yes, the farmer will benefit because this action will increase the value of the land if and when the farmer decides to sell. d. Yes, but only if the project is subsidized by the government or private conservation groups.
If the natural rate of unemployment equals 4 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals:
A. 10 percent. B. 2 percent. C. 6 percent. D. ?2 percent.
Which of the following best explains why the line for disposable income is vertical?
a. An increase in real wealth raises consumption spending.
b. Disposable income is being held constant to examine autonomous factors.
c. As household debt increases, consumption spending falls.
d. Not all income is used to buy goods and services; some is saved or taxed away.
The government of Southland wants to improve resource allocation in the country. Which of the following actions by the Southland government is most likely to accomplish this?
A) Promising to cover every risk of loss for private firms. B) Weakening enforcement of laws and contracts. C),Coercing all firms to innovate and invest. D)Taxing polluters and subsidizing firms that are creating significant positive externalities.