Download Green Economics Homework 1 Essay questions. Pick any 5

Green Economics
Homework 1
Essay questions. Pick any 5 questions from the list below. An excellent answer should be as detailed
as possible and where appropriate, should include a QUOTE from your textbook or from other extra
readings, a NUMBER, or an EXAMPLE to support your point of view.
1. What does economics study? What does environmental or ecological economics study?
2. The First Law of Thermodynamics states that energy can not be created or destroyed. Does this
imply that we will never have a shortage of energy? Explain.
3. Define the Second Laws of Thermodynamics. What happens to the total energy of the system
when we burn oil? Would it be possible to invent an automobile that could capture its own
exhaust and burn it again?
4. Give one example of how incentives affect your own behavior.
5. Using a supply and demand diagram, illustrate how a hurricane affects the market for
construction materials. Show the change in supply or demand. Predict what will happen to the
equilibrium price and quantity immediately after the described shock.
6. Explain how prices are determined in a market economy.
7 . In Chapter 1 of “Plan B 3.0” L.Brown writes: “ The indirect costs of burning coal exceed the
direct costs, those of mining and coal and transporting it to the power plant. Neglecting to
account for these indirect costs, the market is undervaluing many goods and services, creating
economic distortions.” What kind of indirect costs does burning coal impose? What
goods/services does market undervalue as a result of using “dirty” fuels like coal and oil? What
kind of “wrong” choices might this lead to?
8. In Chapter 1 of “Plan B 3.0” L. Brown mentions “failing states”. What are the characteristics of
the failing regimes? How does political instability within “failing states” contribute to the world
environmental problems?
Multiple choice. Mark correct answers below.
1. The fundamental issue of economics is to
A) choose the highest value goods for a society to produce.
B) analyze choices that must be made because of the scarcity of resources.
C) distribute income as equally as possible.
D) prove that market systems are superior to socialist systems.
E) explain how to make money.
2. The opportunity cost of building a new national park is the:
A) cost of land used for the park
B) increased pollution to the wildlife habitat at the park.
C) alternative uses for the land and money spent on building the park.
D) cost of constructing park buildings and highways to get to it.
E) cost of hiring staff and park rangers to provide services for visitors.
3. If the price of gasoline increases:
A) The price of gasoline-using cars will increase.
B) Demand for the Honda electric cars will increase.
C) The price of the new Honda electric cars will decline.
D) The supply of gasoline –using cars will increase.
E) The supply of gasoline will increase.
4.
Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat
substitute) to
A) shift rightward.
B) shift leftward.
C) become steeper.
D) become flatter.
E) become upward sloping.
5. If the demand for organic apples INCREASES and the supply of organic apples INCREASES, the
quantity of organic applies sold will ____ and the price will ____ .
A) increase, increase
B) increase, decrease
C) decrease, either increase or decrease
D) increase, either increase or decrease
E) either increase or decrease, decrease
6. The price of coal fell and the quantity sold also fell. Everything else being equal, it is reasonable to
conclude that
A) The supply of coal fell
B) More efficient mining equipment was installed
C) Consumer incomes fell due to recession
D) Coal miners received large wage increases
E) The price of oil fell
7. In the Wealth of Nations, Adam Smith argues that:
A) in the long run we are all dead.
B) profits are maximized where marginal revenue equals net marginal benefits.
C) benevolence and altruism lead to the efficient allocation of resources.
D) self-interest leads to the efficient allocation of resources.
E) universal healthcare is a superior alternative to private insurance.
8. California is a major producer of grapes used in wine production. There is an unexpected wildfire in
California that destroys some of the grapes. What happens in the market for wine, if nothing else
changes?
A) Demand for wine increases. Price decreases and quantity increases.
B) Demand for wine decreases. Price increases and the effect on quantity is ambiguous.
C) Demand and supply decrease. Price increases and quantity decreases.
D) Supply of wine increases. Price decreases and quantity increases.
E) Supply of wine decreases. Price increases and quantity decreases.
9. Which of the following is most likely to shift the demand curve for electricity to the left?
A) Consumers becoming more energy conscious.
B) An increase in the price of natural gas, a substitute source of energy.
C) A decrease in the price of electricity.
D) An increase in income.
E) New technology allows more efficient production of electricity.
10. A writers' strike in Hollywood is affecting the production of movies. This month only two movies will
be released. What will happen in the market for popcorn at cinemas?
a. There will be a decrease in the quantity demanded.
b. Theaters will drop price so they can sell more popcorn.
c. There will be a decrease in demand.
d. Theaters will sell more Coke.
e. Demand will increase.