Scribd Logo
Upload

Welcome to Scribd!

  • 91 views

    Pre Mid-Term Exam Paper (Sample 2) Eco 335 2014

    Uploaded by

    bob joe
    1. The document discusses waste disposal in Cape Town, South Africa. 2 million tons of waste is disposed of annually at a landfill site at the edge of the city. The municipality collects 50% of city garbage. 2. Negative externalities from the landfill include methane gas emissions causing health costs, bad odor requiring air purifiers and double glazing, and underground water pollution requiring water purifiers. 3. If a private company locates an energy recovery plant near the landfill, it may enjoy pecuniary externalities like subsidized waste prices from the municipality to promote renewable energy or reduced waste collection costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Pre Mid-Term Exam Paper (Sample 2) Eco 335 2014

    Uploaded by

    bob joe
    91 views3 pages
    1. The document discusses waste disposal in Cape Town, South Africa. 2 million tons of waste is disposed of annually at a landfill site at the edge of the city. The municipality collects 50% of city garbage. 2. Negative externalities from the landfill include methane gas emissions causing health costs, bad odor requiring air purifiers and double glazing, and underground water pollution requiring water purifiers. 3. If a private company locates an energy recovery plant near the landfill, it may enjoy pecuniary externalities like subsidized waste prices from the municipality to promote renewable energy or reduced waste collection costs.

    Original Description:

    Urban Economics

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. The document discusses waste disposal in Cape Town, South Africa. 2 million tons of waste is disposed of annually at a landfill site at the edge of the city. The municipality collects 50% of city garbage. 2. Negative externalities from the landfill include methane gas emissions causing health costs, bad odor requiring air purifiers and double glazing, and underground water pollution requiring water purifiers. 3. If a private company locates an energy recovery plant near the landfill, it may enjoy pecuniary externalities like subsidized waste prices from the municipality to promote renewable energy or reduced waste collection costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    91 views3 pages

    Pre Mid-Term Exam Paper (Sample 2) Eco 335 2014

    Uploaded by

    bob joe
    1. The document discusses waste disposal in Cape Town, South Africa. 2 million tons of waste is disposed of annually at a landfill site at the edge of the city. The municipality collects 50% of city garbage. 2. Negative externalities from the landfill include methane gas emissions causing health costs, bad odor requiring air purifiers and double glazing, and underground water pollution requiring water purifiers. 3. If a private company locates an energy recovery plant near the landfill, it may enjoy pecuniary externalities like subsidized waste prices from the municipality to promote renewable energy or reduced waste collection costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Urban

    Economics: 335
    2nd October 2014
    Bipasha Chatterjee
    Pre-Midterm Assessment: 25 Marks
    1. In the City of Cape Town, South Africa, 2 million tons of waste is disposed off at a landfill site
    each year (De Wit and Nahman, 2009). The municipality collects 50% of the city garbage
    produced by consumers and disposes that in the municipal landfill site located at the edge of the
    city. In this example, the landfill is a:
    a. public good
    b. open access good
    c. private good
    2. The external costs arising due to the negative externalities created by the landfill at the city
    edge are as follows (select the correct answer/answers from the list):
    a. Methane gas emission from the landfill creates health related cost for the residents;
    b. Bad odor from the landfill adds cost for installing air purifier and double glazing in the
    neighborhood houses;
    c. Underground water pollution through chemical seepage from the waste leads to cost for
    installing water purifier in the neighborhood houses;
    d. Residents bear the cost of city-tax for door-to-door garbage clearance, waste disposal at
    the landfill and maintenance of the landfill.
    3. The negative externalities of the landfill in Cape Town are examples of:
    a. Consumer externalities
    b. Producer externalities
    4. If a private company locates its Energy Recovery Plant near the landfill to produce energy
    from waste what kind of pecuniary externalities that company may enjoy (choose one answer
    only from the list):
    a. The company gets to buy waste at a subsidized price from the Municipality, as the
    Government wants to promote renewable energy production.
    b. The company has reduced cost for waste collection, as it does not need to hire trucks and
    employ people for door-to-door garbage collection.
    c. Both a & b are correct answers.
    5. In the following diagram, in the absence of any Government intervention or control over
    garbage production by the consumers, what is the efficient level of waste that will be produced by
    the consumers (choose one answer from the list)?
    a.
    b.
    c.
    d.

    C, 2 million tons
    C, 4 million tons
    K, 2million tons
    K, 4 million tons

    $ cost per ton of waste produced

    Urban Economics: 335


    2nd October 2014
    Bipasha Chatterjee

    6. In this example assume that the efficient level of garbage production costs $10 per ton of waste
    (produced by the consumers); however, negative externalities of waste production cause an
    external damage cost of $5 per ton of waste. Mark in the diagram the location of $15 per ton
    waste that includes the social damage cost of $5.
    7. An unregulated market produces too ____________ of garbage with negative externalities and
    too _____________ of a good with an external benefit.
    a.
    b.
    c.
    d.

    much; much
    much; little
    little; much
    little; little

    8. Choose the right answer/answers:


    a. Social Marginal Cost = Private Marginal Cost Social Marginal Damage
    b. Social Marginal Cost = Private Marginal Cost + Social Marginal Damage
    c. Private Marginal Benefit = Social Marginal Benefit Social Marginal Damage
    d. Private Marginal Benefit =Social Marginal Benefit + Social Marginal Damage
    9. Connect the concepts listed under column A with the concepts listed under column B by
    joining them with a straight line:
    A

    Negative production externality:

    SMC curve lies below PMC curve

    Positive production externality:

    SMB curve lies above PMB curve

    Negative consumption externality

    SMC curve lies above PMC curve

    Positive consumption externality:

    SMB curve lies below PMB curve

    Urban Economics: 335


    2nd October 2014
    Bipasha Chatterjee
    10. Complete the definition by filling in the blanks:
    a. Pecuniary agglomeration economies or externalities reduce the ___________ of inputs without
    affecting their productivity.
    b. Economies of scale operate internally within a firm, without regard to the external
    environment. Agglomeration economies operate ___________(internally within/external to) a
    firm.
    11. Fill in the blanks by choosing the right answer from the multiple-choice list:
    Average cost tells the producer how much the average or typical unit of output costs to produce
    is. Marginal cost, meanwhile, tells the producer how much the last unit of output costs to produce
    is. A government subsidy to a firm aims to ___________ average cost of production in the long
    run and tax on a firm aims to __________ average cost of production in the long run.
    a.
    b.
    c.
    d.

    Increase, increase
    Decrease, decrease
    Increase, decrease
    Decrease, increase

    12. Fill in the blanks:


    The Environmental Kuznets curve shows the relationship between environmental degradation and
    ___________________. The relationship between these two factors is represented by an inverted
    U shaped curve. When property rights are well defined in a city the inverted U curve is
    ________________ (flatter / steeper).
    13. Complete the definition by choosing the right answer/answers:
    Sustainable development seeks to ensure that we meet our needs of the present
    a.
    b.
    c.
    d.

    without compromising the ability of future generations to meet their own needs.
    without decreasing the per capita utility of future generation.
    by maximizing our utility.
    by aiming for Pareto optimality.

    14. True or False:


    a. Herman Daly is a proponent of the weak sustainability paradigm which believes that
    natural capital can be substituted with man made capital both as inputs into the production
    process or as consumption goods.
    b. Robert Solow is a proponent of weak sustainability paradigm that believes natural capital
    can be substituted with man-made capital.
    c. Herman Daly is the proponent of Strong Sustainability paradigm that believes natural
    resources are non-substitutable
    e. Weak Sustainability paradigm believes in reducing consumption of natural resources.
    f. Strong sustainability paradigm promotes conservation of natural resources.

    You might also like