Supply shifted left Supply shifted right Demand shifted left Demand shifted right

1. As the price of gasoline fell in the United States during the 1990’s, more people bought large cars. Did supply or demand shift, and which way? • Supply shifted left • Supply shifted right • Demand shifted left • Demand shifted right

2. After a hurricane, Florida hoteliers often find that people cancel their upcoming vacations, leaving them with empty hotel rooms. This causes: • a surplus of hotel rooms and prices fall • a surplus of hotel rooms and prices rise • a shortage of hotel rooms and prices rise • a shortage of hotel rooms and prices fall

3. There are essentially three ways of reducing M (raw material usage) and, therefore, residuals discharged into the natural environment. These include all of the following except • reducing G (output of goods) • increasing Rp (production residuals) • increasing rRp + rRc (recycled production and consumption residuals) • all of the above.

4. All of the following are examples of point-source pollutants except one. Which one is not an example of a point-source pollutant? • municipal waste treatment plants • agricultural chemical runoff • electric power plants • Eramet Metals manufacturing plant

5. Waste water runoff from large poultry farms adversely affects their neighbors. You know you are at the socially optimal level when: • Supply equals demand. • Supply is less than demand. • Marginal social benefit equals marginal social cost. • Marginal social benefit is greater than marginal social cost.

6. Public goods are distinguished by two primary characteristics. These are: • market failure; high prices • government intervention; high prices • nonrivalry; nonexclusivity • rivalry; exclusivity

7. The efficient output will be less than the free market output when: • Marginal social cost and marginal private cost are equal • Marginal social cost is greater than marginal private cost • Marginal social benefit and marginal private benefit are equal • Marginal social benefit is greater than marginal private benefit

8. The table below shows the marginal benefit from water quality for the only two citizens of a town. Water quality is a public good. If the marginal cost of water quality is $75 per quality unit, what is the efficient quantity of water quality? • 1 • 2 • 3 • 4 • 5 • 6

9. Rocky Mountain Forest is a government-owned forest in which private citizens were allowed in the past to harvest as much timber as they wanted free of charge. Which of the following statements best describes the problem with this scenario? • Since the Rocky Mountain Forest is government owned, it is likely to be inefficient. • Since the timber is free, the individual’s marginal cost of harvesting the timber is greater than the marginal social cost of harvesting a tree, leading to over harvesting. • The marginal social cost of harvesting a tree is greater than a private logger’s individual marginal cost, which leads to over harvesting.

10. Chris Rock on Bullet Control