Question 1

The primary focus of natural resource economics is to develop policies for harvesting or extracting natural resources that

Accepted Answer

A) minimize the net costs from doing so. 
B) maximize the net benefits from doing so. 
C) minimize the negative externalities of doing so. 
D) maximize the positive externalities of doing so. 
A) minimize the net costs from doing so. 
B) maximize the net benefits from doing so. 
C) minimize the negative externalities of doing so. 
D) maximize the positive externalities of doing so.

Question 2

Because of Environmental Protection Agency pollution credits to biodiesel producers, biodiesel becomes economically viable (as or less costly than using oil)when oil prices reach _____ or more per barrel.

Accepted Answer

A) $110 
B) $55 
C) $80 
D) $127 
A) $110 
B) $55 
C) $80 
D) $127

Question 3

Refer to the diagram, representing Slippery Slope Oil Company. A $5 decrease in the user cost would

Accepted Answer

A) decrease the optimal quantity extracted in the present. 
B) increase the optimal quantity extracted in the present. 
C) not affect the optimal quantity extracted in the present. 
D) reduce extraction costs in the present. 
A) decrease the optimal quantity extracted in the present. 
B) increase the optimal quantity extracted in the present. 
C) not affect the optimal quantity extracted in the present. 
D) reduce extraction costs in the present.

Question 4

The key to optimally managing renewable and nonrenewable resources is to design incentive structures that

Accepted Answer

A) reduce the costs of production to the lowest possible level. 
B) increase the benefits from production to the highest possible level. 
C) weigh the net benefits of current use with the net benefits of future use. 
D) add the net benefits of current use to the net benefits of future use. 
A) reduce the costs of production to the lowest possible level. 
B) increase the benefits from production to the highest possible level. 
C) weigh the net benefits of current use with the net benefits of future use. 
D) add the net benefits of current use to the net benefits of future use.

Question 5

Individual transferable quotas (ITQs)

Accepted Answer

A) promote efficiency and limit catches. 
B) promote efficiency in production but still lead to overfishing. 
C) limit catches but encourage production cost increases that are inefficient. 
D) have failed to limit catches or promote efficiency. 
A) promote efficiency and limit catches. 
B) promote efficiency in production but still lead to overfishing. 
C) limit catches but encourage production cost increases that are inefficient. 
D) have failed to limit catches or promote efficiency.

Question 6

Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $28. If the market price of Pacific halibut is $40 per ton, what is the minimum amount per ton that Melanie would have to offer Oli to convince him to sell Melanie his ITQs?

Accepted Answer

A) $8. 
B) $10. 
C) $12. 
D) $20. 
A) $8. 
B) $10. 
C) $12. 
D) $20.

Question 7

Productive inputs capable of replacing themselves if harvested at moderate rates are known as

Accepted Answer

A) renewable natural resources. 
B) natural capital. 
C) nonrenewable natural resources. 
D) fossil fuels. 
A) renewable natural resources. 
B) natural capital. 
C) nonrenewable natural resources. 
D) fossil fuels.

Question 8

Renewable resources

Accepted Answer

A) can never be exhausted permanently. 
B) can be exhausted if harvest rates exceed replenishment rates for an extended period. 
C) can be exhausted if replenishment rates exceed harvest rates for an extended period. 
D) will tend to be overharvested when they are private property. 
A) can never be exhausted permanently. 
B) can be exhausted if harvest rates exceed replenishment rates for an extended period. 
C) can be exhausted if replenishment rates exceed harvest rates for an extended period. 
D) will tend to be overharvested when they are private property.

Question 9

According to data from the UN Food and Agriculture Organization, which of the following nations saw a significant decline in the amount of land covered by forests in the period 2010-2015?

Accepted Answer

A) Thailand 
B) China 
C) Togo 
D) United States 
A) Thailand 
B) China 
C) Togo 
D) United States

Question 10

In the United States in 2017, one million BTUs of energy yielded _______ worth of goods and services (in 2009 dollars).

Accepted Answer

A) $57.90 
B) $63.09 
C) $162.07 
D) $184.55 
A) $57.90 
B) $63.09 
C) $162.07 
D) $184.55

Question 11

Refer to the diagram, representing Slippery Slope Oil Company. What price of oil would make 15 million barrels the optimal quantity to extract and sell this year?

Accepted Answer

A) 50 
B) 110 
C) 70 
D) 90 
A) 50 
B) 110 
C) 70 
D) 90

Question 12

What was the largest U.S. fishery, in dollar terms, in 2016?

Accepted Answer

A) Pacific halibut 
B) sea scallop 
C) walleye pollock 
D) lobster 
A) Pacific halibut 
B) sea scallop 
C) walleye pollock 
D) lobster

Question 13

Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ and the current market price is $5 per ton. If Dave offered to sell his ITQ to Sue for $2,000, he and Sue would

Accepted Answer

A) make the sale because they're both better off. 
B) not make the sale, because Sue is better off and Dave is not. 
C) not make the sale, because Dave is better of and Sue is not. 
D) not make the sale, because neither is better off. 
A) make the sale because they're both better off. 
B) not make the sale, because Sue is better off and Dave is not. 
C) not make the sale, because Dave is better of and Sue is not. 
D) not make the sale, because neither is better off.

Question 14

The real cost of buying a market basket of 25 important commodities in 2019 compared to the cost in the 1845-1850 base period in The Economist's Commodity Price Index is

Accepted Answer

A) higher by about 100 percent. 
B) about the same or equal. 
C) lower by about 60 percent. 
D) higher by about 50 percent. 
A) higher by about 100 percent. 
B) about the same or equal. 
C) lower by about 60 percent. 
D) higher by about 50 percent.

Question 15

It is generally easier to prevent deforestation than fishery collapse because

Accepted Answer

A) it is easier to establish and enforce property rights on national lands than in international waters. 
B) there is greater incentive to have sustainable forests than sustainable fisheries. 
C) the demand for wood products has dropped significantly, while the demand for fish has grown significantly. 
D) All of the other possible answers are correct. 
A) it is easier to establish and enforce property rights on national lands than in international waters. 
B) there is greater incentive to have sustainable forests than sustainable fisheries. 
C) the demand for wood products has dropped significantly, while the demand for fish has grown significantly. 
D) All of the other possible answers are correct.

Question 16

If the world runs out of oil, it will also run out of energy.

Accepted Answer

A) True 
 B)False

Question 17

Refer to the diagram, representing Slippery Slope Oil Company. A $10 increase in the user cost would shift

Accepted Answer

A) up the extraction cost curve only and reduce the amount of oil extracted in the present. 
B) up both the extraction cost and total cost curves and reduce the amount of oil extracted in the present. 
C) up the total cost curve only and reduce the amount of oil extracted in the present. 
D) down the total cost curve and increase the amount of oil extracted in the future. 
A) up the extraction cost curve only and reduce the amount of oil extracted in the present. 
B) up both the extraction cost and total cost curves and reduce the amount of oil extracted in the present. 
C) up the total cost curve only and reduce the amount of oil extracted in the present. 
D) down the total cost curve and increase the amount of oil extracted in the future.

Question 18

Alex and Belle are both loggers wanting to harvest timber from the same forest. Alex prefers to harvest and replant at a sustainable rate; Belle 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 Belle's part of the land and harvest and replant in a sustainable manner. 
B) Belle 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 Belle's part of the land and harvest and replant in a sustainable manner. 
B) Belle 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

Renewable natural resources can never be exhausted.

Accepted Answer

A) True 
 B)False

Question 20

In time-value of money analysis, an increase in interest rates

Accepted Answer

A) raises the present value of a future amount. 
B) lowers the present value of a future amount. 
C) lowers the future value of a present amount. 
D) has no effect on present or future amount. 
A) raises the present value of a future amount. 
B) lowers the present value of a future amount. 
C) lowers the future value of a present amount. 
D) has no effect on present or future amount.

Exam 19: Natural Resource and Energy Economics

The primary focus of natural resource economics is to develop policies for harvesting or extracting natural resources that

Because of Environmental Protection Agency pollution credits to biodiesel producers, biodiesel becomes economically viable (as or less costly than using oil)when oil prices reach _____ or more per barrel.

Refer to the diagram, representing Slippery Slope Oil Company. A $5 decrease in the user cost would

The key to optimally managing renewable and nonrenewable resources is to design incentive structures that

Individual transferable quotas (ITQs)

Productive inputs capable of replacing themselves if harvested at moderate rates are known as

Renewable resources

According to data from the UN Food and Agriculture Organization, which of the following nations saw a significant decline in the amount of land covered by forests in the period 2010-2015?

In the United States in 2017, one million BTUs of energy yielded _______ worth of goods and services (in 2009 dollars).

Refer to the diagram, representing Slippery Slope Oil Company. What price of oil would make 15 million barrels the optimal quantity to extract and sell this year?

What was the largest U.S. fishery, in dollar terms, in 2016?

Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ and the current market price is $5 per ton. If Dave offered to sell his ITQ to Sue for $2,000, he and Sue would

The real cost of buying a market basket of 25 important commodities in 2019 compared to the cost in the 1845-1850 base period in The Economist's Commodity Price Index is

It is generally easier to prevent deforestation than fishery collapse because

If the world runs out of oil, it will also run out of energy.

Refer to the diagram, representing Slippery Slope Oil Company. A $10 increase in the user cost would shift

Renewable natural resources can never be exhausted.

In time-value of money analysis, an increase in interest rates

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, 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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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