Part 1 Choose the best answer for each of the following multiple-choice questions:

1. Sustainable development means that

a. maximum efficiency is achieved only by allowing firms to freely pollute.
b. firm goodwill is the only way to achieve improvement in environmental per- formance.
c. a company can increase economic efficiency while reducing negative envi- ronmental impacts.
d. development meets the needs of the present without compromising the abil- ity of future generations to meet their own needs.
e. Both c and d.

2. Firms strive to be ecoefficient so that they

a. can achieve a lower cost of capital.
b. can reduce costs and become more competitive.
c. can achieve an improved image in their markets.
d. can find new markets for useless residues.
e. All of the above.

3. Evaluating and selecting suppliers is an example of a(n)

a. external failure cost.
b. societal cost.
c. internal failure cost.
d. prevention cost.
e. realized external failure cost.

4. Receiving medical care due to polluted air is an example of

a. an unrealized external failure cost.
b. a private cost.
c. an internal failure cost.
d. minimizing environmental costs.
e. Both a and b.

5. Environmental failure costs can be reduced by investing more in

a. pollution control equipment.
b. processes that treat and dispose of toxic waste.
c. land restoration projects.
d. scrubbers.
e. designing processes.

6. Assigning all environmental costs to products is an example of

a. full private costing.
b. environmental postpurchase costs.
c. full environmental costing.
d. life-cycle costing.
e. product stewardship.

7. Environmental income in an environmental financial report refers to

a. current savings from reducing the dispersion of toxic materials.
b. revenues from environmental actions such as recycling.
c. ongoing savings from reducing the energy intensity of goods and services.
d. ongoing savings from reducing the material intensity of goods and services.
e. Both b and c.

8. Cost avoidance in an environmental financial report refers to

a. current savings from reducing the dispersion of toxic materials.
b. ongoing savings from reducing the material intensity of goods and services.
c. ongoing savings from reducing the energy intensity of goods and services.
d. revenues from environmental actions such as recycling.
e. Both b and c.

9. Select the item that represents environmental detection costs:

a. Developing environmental performance measures
b. Recycling products
c. Disposing of toxic materials
d. Carrying out contamination tests
e. None of the above.

10. An example of an environmental internal failure cost is

a. cleaning up oil spills.
b. damaging ecosystems from solid waste disposal.
c. verifying supplier environmental performance.
d. measuring levels of contamination.
e. none of the above.

11. An example of a societal cost is

a. maintaining pollution equipment.
b. recycling scrap.
c. disposing of toxic materials.
d. medical care due to polluted air.
e. all of the above.

12. An example of an environmental prevention cost is

a. restoring land to its natural state.
b. developing environmental management systems.
c. licensing facilities for producing contaminants.
d. auditing environmental activities.
e. treating toxic materials.