Question 1

If users can benefit from conservation, resources will be

Accepted Answer

A) unprofitable. 
B) extracted at a fast rate. 
C) preserved for future use. 
D) overused in the present and the future. 
A) unprofitable. 
B) extracted at a fast rate. 
C) preserved for future use. 
D) overused in the present and the future.

Question 2

In 2015, about what percentage of the world's land area was forested?

Accepted Answer

A) 10 percent 
B) 30 percent 
C) 50 percent 
D) 75 percent 
A) 10 percent 
B) 30 percent 
C) 50 percent 
D) 75 percent

Question 3

If resource extraction companies can benefit from both present and future extraction, they will limit current extraction to only those units which are more profitable to extract in the present rather than in the future.

Accepted Answer

A) True 
 B)False

Question 4

As technologies improve, the costs of producing alternatives will likely fall, reducing the cost of replacing oil.

Accepted Answer

A) True 
 B)False

Question 5

Since 1990, approximately how much trash per person per day has been generated in the United States?

Accepted Answer

A) 2 pounds. 
B) 3.4 pounds. 
C) 4.5 pounds. 
D) 12.8 pounds. 
A) 2 pounds. 
B) 3.4 pounds. 
C) 4.5 pounds. 
D) 12.8 pounds.

Question 6

Which of the following is the best example of a market failure that would lead a firm to extract resources at a rate that is faster than the rate that would maximize its long-term stream of profits?

Accepted Answer

A) The market price of the resource rises. 
B) Weak property rights create fears that firms will not be allowed to extract in the future. 
C) Market interest rates increase. 
D) New information suggests that the demand for the resource will be greater in the future. 
A) The market price of the resource rises. 
B) Weak property rights create fears that firms will not be allowed to extract in the future. 
C) Market interest rates increase. 
D) New information suggests that the demand for the resource will be greater in the future.

Question 7

If the world begins to run out of oil, which of the following statements would be incorrect?

Accepted Answer

A) The relative price of oil would become very high. 
B) The world would run out of energy. 
C) Alternative energy sources would become economically viable. 
D) The cost of energy would rise. 
A) The relative price of oil would become very high. 
B) The world would run out of energy. 
C) Alternative energy sources would become economically viable. 
D) The cost of energy would rise.

Question 8

Which of the following factors fosters the survival of alternative-energy companies?

Accepted Answer

A) low price of conventional energy 
B) taxes on alternative energy 
C) government subsidies for alternative energy 
D) high production costs of alternative energy 
A) low price of conventional energy 
B) taxes on alternative energy 
C) government subsidies for alternative energy 
D) high production costs of alternative energy

Question 9

Total allowable catch (TAC)

Accepted Answer

A) explicitly limits the number of days in a season that particular fish may be caught. 
B) explicitly limits the number of boats allowed to fish in a particular area. 
C) explicitly limits the number or tonnage of fish that can be harvested from a particular fishery. 
D) issues tradable permits limiting the number of fish a particular fisher can catch. 
A) explicitly limits the number of days in a season that particular fish may be caught. 
B) explicitly limits the number of boats allowed to fish in a particular area. 
C) explicitly limits the number or tonnage of fish that can be harvested from a particular fishery. 
D) issues tradable permits limiting the number of fish a particular fisher can catch.

Question 10

An electricity company has the opportunity to use natural gas to generate electricity at a cost of $30 per unit in 2 years.The current market rate is 4 percent.The present value of this cost is about

Accepted Answer

A) $28. 
B) $29. 
C) $30. 
D) $32. 
A) $28. 
B) $29. 
C) $30. 
D) $32.

Question 11

World commodity prices over the past 150 years have

Accepted Answer

A) steadily decreased in both the short run and long run. 
B) decreased in the long run despite occasional short-run increases. 
C) remained constant in the long run despite occasional short-run fluctuations. 
D) steadily increased in both the short run and long run. 
A) steadily decreased in both the short run and long run. 
B) decreased in the long run despite occasional short-run increases. 
C) remained constant in the long run despite occasional short-run fluctuations. 
D) steadily increased in both the short run and long run.

Question 12

In fisheries management, a fishery is defined as

Accepted Answer

A) an operation that breeds and releases fish and other marine animals into the wild. 
B) a stock of fish or other marine animals that can be thought of as a logically distinct group. 
C) a company that harvests fish or other marine animals. 
D) a government organization that regulates the harvesting of fish and other marine animals. 
A) an operation that breeds and releases fish and other marine animals into the wild. 
B) a stock of fish or other marine animals that can be thought of as a logically distinct group. 
C) a company that harvests fish or other marine animals. 
D) a government organization that regulates the harvesting of fish and other marine animals.

Question 13

Demographers predict that declines in birthrates are in part due to

Accepted Answer

A) more strict adherence to religious beliefs and practices regarding human reproduction. 
B) fewer career opportunities for women in many societies. 
C) the increased expense of raising a child in modern societies. 
D) falling standards of living in many countries around the world. 
A) more strict adherence to religious beliefs and practices regarding human reproduction. 
B) fewer career opportunities for women in many societies. 
C) the increased expense of raising a child in modern societies. 
D) falling standards of living in many countries around the world.

Question 14

Negative externalities from energy production should be considered when comparing the cost of an energy source, because they

Accepted Answer

A) improve energy production. 
B) reduce the total costs of production. 
C) are an additional cost of using that source. 
D) are taxed or subsidized by government to encourage production. 
A) improve energy production. 
B) reduce the total costs of production. 
C) are an additional cost of using that source. 
D) are taxed or subsidized by government to encourage production.

Question 15

An electricity company is considering damming a small river to generate electricity at a cost of $160,000 and a profit of $200,000 in 5 years.The current market rate is 5 percent.Should the company make the investment?

Accepted Answer

A) Yes, the future value of the profit is greater than the present value of the cost. 
B) No, the future value of the profit is less than the present value of the cost. 
C) Yes, the present value of the profit is greater than the present value of the cost. 
D) No, the present value of the profit is less than the present value of the cost. 
A) Yes, the future value of the profit is greater than the present value of the cost. 
B) No, the future value of the profit is less than the present value of the cost. 
C) Yes, the present value of the profit is greater than the present value of the cost. 
D) No, the present value of the profit is less than the present value of the cost.

Question 16

If a country's replacement rate is two births per woman and its total fertility rate is four births per woman, the country's population will decline.

Accepted Answer

A) True 
 B)False

Question 17

(Consider This) Which of the following best explains why wind and solar power have been slow to replace coal- and gas-based energy production?

Accepted Answer

A) Energy production with coal and gas generates less pollution. 
B) Wind and solar energy availability is subject to large fluctuations because of the inability to store the power. 
C) Governments have heavily subsidized coal and gas energy plants, but have not subsidized wind and solar. 
D) Consumers are largely unwilling to buy power generated from wind and solar. 
A) Energy production with coal and gas generates less pollution. 
B) Wind and solar energy availability is subject to large fluctuations because of the inability to store the power. 
C) Governments have heavily subsidized coal and gas energy plants, but have not subsidized wind and solar. 
D) Consumers are largely unwilling to buy power generated from wind and solar.

Question 18

Alex and Ben are both loggers wanting to harvest timber from the same forest.Alex prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees as possible to maximize short-run profit and then move on.They face the same production costs.If property rights are well-defined and enforced,

Accepted Answer

A) Alex could buy Ben's part of the land and harvest and replant in a sustainable manner. 
B) Ben could buy Alex's part of the land and harvest all the timber as quickly as possible. 
C) Incentives to harvest and replant in a sustainable manner are greater than with no property rights. 
D) Any of the results described in the other possible answers could occur in this situation. 
A) Alex could buy Ben's part of the land and harvest and replant in a sustainable manner. 
B) Ben could buy Alex's part of the land and harvest all the timber as quickly as possible. 
C) Incentives to harvest and replant in a sustainable manner are greater than with no property rights. 
D) Any of the results described in the other possible answers could occur in this situation.

Question 19

Which of the following is the best example of a fishery?

Accepted Answer

A) all marine life along the Great Barrier Reef 
B) Pacific halibut 
C) U.S.Department of Fish and Game 
D) crab 
A) all marine life along the Great Barrier Reef 
B) Pacific halibut 
C) U.S.Department of Fish and Game 
D) crab

Question 20

Low birthrates in industrialized countries are a major concern for governments, reducing the number of potential soldiers and taxpayers to support social programs.

Accepted Answer

A) True 
 B)False

Exam 19: Natural Resource and Energy Economics

If users can benefit from conservation, resources will be

In 2015, about what percentage of the world's land area was forested?

If resource extraction companies can benefit from both present and future extraction, they will limit current extraction to only those units which are more profitable to extract in the present rather than in the future.

As technologies improve, the costs of producing alternatives will likely fall, reducing the cost of replacing oil.

Since 1990, approximately how much trash per person per day has been generated in the United States?

Which of the following is the best example of a market failure that would lead a firm to extract resources at a rate that is faster than the rate that would maximize its long-term stream of profits?

If the world begins to run out of oil, which of the following statements would be incorrect?

Which of the following factors fosters the survival of alternative-energy companies?

Total allowable catch (TAC)

An electricity company has the opportunity to use natural gas to generate electricity at a cost of $30 per unit in 2 years.The current market rate is 4 percent.The present value of this cost is about

World commodity prices over the past 150 years have

In fisheries management, a fishery is defined as

Demographers predict that declines in birthrates are in part due to

Negative externalities from energy production should be considered when comparing the cost of an energy source, because they

An electricity company is considering damming a small river to generate electricity at a cost of $160,000 and a profit of $200,000 in 5 years.The current market rate is 5 percent.Should the company make the investment?

If a country's replacement rate is two births per woman and its total fertility rate is four births per woman, the country's population will decline.

(Consider This) Which of the following best explains why wind and solar power have been slow to replace coal- and gas-based energy production?

Which of the following is the best example of a fishery?

Low birthrates in industrialized countries are a major concern for governments, reducing the number of potential soldiers and taxpayers to support social programs.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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