1. A local forest provides habitat for deer that are harvested by hunters. The hunters receive what type of benefit in this case?
- Direct use value
- Indirect use value
- Option value
- Bequest value
- Existence value
2. A wildlife preserve provides what type of economic benefits?
- Use values only
- Non-use values only
- Existence values only
- Direct and indirect use values only
- Both use and non-use values
3. A decision to postpone commercial development of an undisturbed parcel shows an example of what type of economic benefits?
- Direct use values
- Indirect use values
- Existence values
- Option values
- Bequest values
4. Which one of the following valuation techniques is not based on the value of marketed goods or services?
- Hedonic pricing
- Avoided cost valuation
- Production function valuation
- Contingent valuation
- Engineering cost valuation
5. An economist estimates the value of a nature preserve by calculating the price premium people pay for houses located adjacent to the preserve. This is an example of what type of economic valuation?
- Hedonic pricing
- Production function valuation
- Contingent valuation
- Travel cost method
- Engineering cost valuation
6. Asking people to indicate their economic values in a survey is an example of what type of economic valuation?
- Travel cost method
- Contingent valuation
- Hedonic pricing
- Production function valuation
- Avoided cost valuation
7. Valuing environmental services based on the prices of marketed goods is called ...
- Travel cost method
- Contingent valuation
- Hedonic pricing
- Production function valuation
- Avoided cost valuation
8. Which one of the following techniques would most likely be used to estimate the value of preservation of a remote arctic wildlife preserve?
- Hedonic pricing
- Travel cost method
- Production function valuation
- Engineering cost valuation
- Contingent valuation
9. Which one of the following techniques is an example of the replacement cost method of economic valuation?
- 1) Contingent valuation
- 2) Hedonic pricing
- 3) Travel cost method
- 4) Habitat equivalency analysis
- 5) Cost-effectiveness valuation
10. Which one of the following statements is false?
- Bequest value is the value of environmental services to future generations
- Willingness-to-pay tends to be smaller than willingness-to-accept for the same service
- The production function approach to valuation considers the cost of constructing facilities to provide environmental services
- Contingent valuation can be used to estimate existence values
- The value of just knowing a wild species exists is called indirect use value
11. Which one of the following statements is true?
- A low discount rate is always better for environmental protection
- A high discount rate is always better for environmental protection
- A discount rate of zero is always best for environmental protection
- Discounting will decrease the magnitude of future costs and benefits
- High discount rates should be used to evaluate long-term impacts
12. Suppose the pure rate of time preference is 1%, the growth rate of consumption per capita is 3%, and the elasticity of the marginal utility of consumption is 2. This suggests a value for the social rate of time preference of ...
13. Suppose there is a 30% chance that an oil spill will occur in an area and the economic damage of the potential spill is $1 million. What is the expected value associated with the spill?
- $3,000,000
- $1,000,000
- $300,000
- $30,000
- $3,000
14. If people are risk averse regarding environmental damages...
- Low discount rates should be used
- High discount rates should be used
- Expected values will understate ecological damages
- Irreversible actions should be taken
- Contingent valuation responses will not be valid
15. The precautionary principle is most likely to be applied when some impacts ...
- Involve option values
- Are irreversible
- Are converted to present values
- Are estimated using the avoided cost approach
- Involve indirect use values
16. The precautionary principle is least likely to be applied to which of the following
environmental issues?
- Building a new road
- Global warming
- The approval process of a new pesticide
- Timber harvesting in a rainforest
- Storage of nuclear waste
17. Which one of the following statements is true?
- All projects that provide positive net benefits should be approved
- Cost-effectiveness analysis determines the best policy to achieve a given end
- All projects with a benefit/cost ratio of less than one should be approved
- Positional analysis determines the single proposal that provides the greatest net benefits
- Cost-benefit analysis always provides estimates for all costs and benefits associated with a project
18. Suppose a legislature passes a law that mandates a 50% cut in toxic emissions. What type of analysis would most likely be used to determine how to implement this policy at the lowest cost?
- Contingent valuation
- Cost-effectiveness analysis
- Positional analysis
- Precautionary principle
- Safe minimum standard
19. An analysis approach that considers the relationship of a proposed policy to social objectives is called ...
- Contingent valuation
- Cost-effectiveness analysis
- Hedonic pricing
- Positional analysis
- Risk aversion
20. Which one of the following statements is true?
- Cost-benefit analysis can give an accurate measure of all costs and benefits
- Cost-effectiveness analysis is always preferred to cost-benefit analysis
- Some costs and benefits will not be quantifiable in many cost-benefit analyses
- Policymakers should never use cost-benefit analysis due to its analytical weaknesses
- Cost-effectiveness analysis relies on economic techniques to determine policy objectives