9

Student: ___________________________________________________________________________

1. If the marginal abatement cost of a policy is represented by: MAC = 1,400 - 5E, the total abatement cost
when the target level of emissions is 200 units equals ________.
A. $400
B. $80,000
C. $32,000
D. $16,000
2. Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the idea
that ________.
A. the polluter should pay
B. subsidies are politically unpalatable
C. subsidies can never be cost-effective
D. effluent taxes work better than subsidies
3. Policies that can be readily adapted to new information about damages, technological innovation and
changing economic or social conditions are considered ________.
A. morally superior
B. politically expedient
C. fair
D. flexible
4. The ________ of a policy is not a criterion used to evaluate a pollution control policy.
A. political acceptability
B. fairness
C. cost-effectiveness
D. incentives to innovate
5. A cost-effective policy is always socially efficient.
True False
6. Enforcement costs are critical to the success of environmental programs and should be included in the
overall social costs of the program when evaluating different policy options.
True False
7. Suppose the government is considering two alternative policies to achieve a target level of emissions
for an industry of 500 tonnes. Option 1's approach is summarized by the marginal abatement cost curve:
MAC1 = 800 - E1 and Option 2's approach is summarized by the marginal abatement cost curve: MAC2 =
400 - E2. What is the total abatement cost of achieving the target emissions under each policy? Based
on this calculation, which of the two policies is the cost-effective choice?
8. Suppose the government is considering two alternative policies to achieve a target level of emissions for
an industry of 2,000 tonnes. Option 1's approach is summarized by the marginal abatement cost curve:
MAC1 = 2,200 - E1 and Option 2's approach is summarized by the marginal abatement cost curve: MAC2
= 2,750 - 1.25E2. What is the total abatement cost of achieving the target emissions under each policy?
Based on this calculation, which of the two policies is the cost-effective choice?
 9 Key
1. If the marginal abatement cost of a policy is represented by: MAC = 1,400 - 5E, the total abatement
cost when the target level of emissions is 200 units equals ________.
A. $400
B. $80,000
C. $32,000
D. $16,000
Accessibility: Keyboard Navigation
Difficulty: Easy
Field - Chapter 09 #1
Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.
2. Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the
idea that ________.
A. the polluter should pay
B. subsidies are politically unpalatable
C. subsidies can never be cost-effective
D. effluent taxes work better than subsidies
Accessibility: Keyboard Navigation
Difficulty: Moderate
Field - Chapter 09 #2
Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.
3. Policies that can be readily adapted to new information about damages, technological innovation and
changing economic or social conditions are considered ________.
A. morally superior
B. politically expedient
C. fair
D. flexible
Accessibility: Keyboard Navigation
Difficulty: Easy
Field - Chapter 09 #3
Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.
4. The ________ of a policy is not a criterion used to evaluate a pollution control policy.
A. political acceptability
B. fairness
C. cost-effectiveness
D. incentives to innovate
Accessibility: Keyboard Navigation
Difficulty: Easy
Field - Chapter 09 #4
Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.
5. A cost-effective policy is always socially efficient.
FALSE

If a cost-effective policy results in a level of emissions that differs from the socially efficient level of
emissions then it is not socially efficient.

Accessibility: Keyboard Navigation

Difficulty: Easy
Field - Chapter 09 #5
Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.
6. Enforcement costs are critical to the success of environmental programs and should be included in the
overall social costs of the program when evaluating different policy options.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Field - Chapter 09 #6
Learning Objective: 09-02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.
7. Suppose the government is considering two alternative policies to achieve a target level of emissions
for an industry of 500 tonnes. Option 1's approach is summarized by the marginal abatement cost
curve: MAC1 = 800 - E1 and Option 2's approach is summarized by the marginal abatement cost
curve: MAC2 = 400 - E2. What is the total abatement cost of achieving the target emissions under
each policy? Based on this calculation, which of the two policies is the cost-effective choice?

For Option 1, the TAC1 = (300300) = $45,000. For Option 2, TAC2 = (300150) = $22,500.
Option 2 is the cost-effective choice because it minimizes the total abatement cost of achieving the
target level of emissions.

Difficulty: Easy
Field - Chapter 09 #7
Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.
8. Suppose the government is considering two alternative policies to achieve a target level of emissions
for an industry of 2,000 tonnes. Option 1's approach is summarized by the marginal abatement cost
curve: MAC1 = 2,200 - E1 and Option 2's approach is summarized by the marginal abatement cost
curve: MAC2 = 2,750 - 1.25E2. What is the total abatement cost of achieving the target emissions
under each policy? Based on this calculation, which of the two policies is the cost-effective choice?

For Option 1, the TAC1 = (200200) = $20,000. For Option 2, TAC2 = (200250) = $25,000.
Option 1 is the cost-effective choice because it minimizes the total abatement cost of achieving the
target level of emissions.

Difficulty: Easy
Field - Chapter 09 #8
Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs.
 9 Summary
Category # of Questions
Accessibility: Keyboard Navigation 6
Difficulty: Easy 7
Difficulty: Moderate 1
Field - Chapter 09 8
Learning Objective: 09-01 Explain why a cost-effective policy minimizes total abatement costs. 4
Learning Objective: 09- 4
02 Explain the criteria in addition to efficiency that can be used to assess environmental policies.