MARKET
BASICS
BASICS
What is a market?
A system where buyers and sellers exchange goods and services at established prices.
Which approach believes in free trade and that markets tend to operate efficiently?
A. Classical economics
B. Ordoliberalism
C. The Nordic Model
D. The Hamiltonian model
Classical economics.
Who is associated with specialization, competition, and free trade?
A. Milton Friedman
B. Walter Eucken
C. John Maynard Keynes
D. Adam Smith
Adam Smith.
What makes environmental risks hard to prove and can be used to delay action?
A. Guaranteed enforcement
B. Scientific uncertainty
C. Short supply chains
D. Perfect information
Scientific uncertainty.
Which two intellectual traditions are listed as roots of early U.S. environmentalism?
A. European Romanticism and Transcendentalism
B. Keynesianism and ordoliberalism
C. Monetarism and classical economics
D. Collective bargaining and free trade
European Romanticism and Transcendentalism.
When is a market price at equilibrium?
A. When all products are free
B. When the government bans competition
C. When sellers produce as much as possible regardless of demand
D. When quantity supplied equals quantity demanded
When quantity supplied equals quantity demanded.
Under Real Business Cycle Theory, what do individuals and firms seek to maximize?
A. Individuals maximize imports; firms maximize unemployment
B. Individuals maximize production; firms maximize population
C. Individuals maximize taxes; firms maximize regulation
D. Individuals maximize utility; firms maximize profit
Individuals maximize utility; firms maximize profit.
Which school says the government can stabilize the economy when private demand is insufficient?
A. Ordoliberalism
B. Classical economics
C. Chicago economics
D. Keynesian economics
Keynesian economics.
Why can concentrated costs make environmental rules difficult to pass?
A. Environmental rules never create costs
B. The public always mobilizes more than organized industries
C. Organized industries facing costs may lobby hard, while benefits are spread across the public
D. Everyone benefits equally and immediately
Organized industries facing the costs may lobby hard, while benefits are spread across a public that rarely mobilizes.
Which animal’s decline, alongside the feather-hat trade, is cited as a visible loss that helped spark environmental action?
A. The passenger pigeon
B. The bald eagle
C. The buffalo
D. The polar bear
The buffalo.
What phrase did Adam Smith use for how self-interest can guide markets?
A. The invisible hand
B. The public choice
C. The balanced budget
D. The circular flow
The “invisible hand.”
What does the Efficient Market Theory assumption say about how people act and the information they have?
A. They always follow government instructions
B. They only care about environmental policy
C. They make decisions without any information
D. They act independently and have all the information needed
People act independently and have all the information needed.
Which economist is strongly associated with monetarism?
A. Milton Friedman
B. John Muir
C. Alexander Hamilton
D. Gifford Pinchot
Milton Friedman.
What challenge arises when environmental harms appear decades later but elections reward short-term results?
A. Collective bargaining
B. Efficient market theory
C. Rational expectations
D. Long time horizons
Long time horizons.
Which figure is linked with preservation, the Sierra, and national parks?
A. Alexander Hamilton
B. Gifford Pinchot
C. Walter Eucken
D. John Muir
John Muir.
Name one policy tool listed that can make environmental costs affect decisions.
A. Banning all market exchanges
B. Pollution taxes or subsidies
C. Eliminating all consumer choices
D. Setting every wage to zero
Pollution taxes or subsidies.
What is the Rational Expectation Hypothesis about?
A. The belief that prices never change
B. The idea that firms should never seek profit
C. The claim that governments set all consumer preferences
D. Rational preferences between identifiable outcomes associated with specific values
Rational preferences between identifiable outcomes associated with specific values.
Which model supports government action to develop national productive capacity?
A. Hamiltonian model
B. Classical model
C. Nordic Model
D. Efficient Market Theory
The Hamiltonian model.
What is it called when pollution costs are not priced in and shared resources are overused?
A. A rational expectation
B. A subsidy surplus
C. A balanced market
D. An externality / market failure
An externality / market failure
Who created the U.S. Forest Service to manage land and water for continued use?
A. Adam Smith
B. Gifford Pinchot
C. John Muir
D. Milton Friedman
Gifford Pinchot.
What does the presentation say determines prices in a market?
A. A fixed price chosen by every consumer
B. Only the age of the seller
C. The scarcity and value of the product
D. Only the amount of advertising
The scarcity and value of the product.
Name two supply-side sources of growth listed under Say’s Law.
Any two: expanding labor supply, increasing business efficiency, or increasing labor and capital productivity.
Who is the central figure associated with laying out the core principles of the ordoliberal economic constitution?
A. John Maynard Keynes
B. Walter Eucken
C. Milton Friedman
D. Adam Smith
Walter Eucken.
Why can air, water, and climate issues be difficult to govern across borders?
A. Only consumers have authority over them
B. They occur only within one household
C. They never cross borders
D. Authority is split across local, state, federal, and global actors
Authority is split across local, state, federal, and global actors.
Which two public-health events are linked in the presentation to the EPA and the “Decade of the Environment”?
A. The creation of national parks and the Forest Service
B. The buffalo decline and the feather-hat trade
C. Silent Spring and the Cuyahoga River fire
D. The Great Depression and the oil crisis
Silent Spring and the Cuyahoga River fire.