Question 1

What is the relationship between living standards and birthrates?

Accepted Answer

A) The relationship is negative at low levels of income but becomes increasingly positive as incomes rise. 
B) They are unrelated. 
C) The relationship is positive (directly related). 
D) The relationship is negative (inversely related). 
A) The relationship is negative at low levels of income but becomes increasingly positive as incomes rise. 
B) They are unrelated. 
C) The relationship is positive (directly related). 
D) The relationship is negative (inversely related).

Question 2

Linda fishes for mahi-mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ and the current market price is $13. If Linda sold her ITQ to Tessa for $4,000, society would benefit from

Accepted Answer

A) more fish being caught. 
B) less fish being caught. 
C) an efficiency savings in fishing costs of $2,000. 
D) an efficiency savings in fishing costs of $5,000. 
A) more fish being caught. 
B) less fish being caught. 
C) an efficiency savings in fishing costs of $2,000. 
D) an efficiency savings in fishing costs of $5,000.

Question 3

The table shows the quantity of gold bars in thousands, the extraction cost for each thousand bars (in millions of dollars), and the user cost of each thousand bars (in millions of dollars)facing the OZ Mining Company this year (all costs are marginal). If the current price of a bar of gold is $35,000, how many bars (in thousands)should OZ extract and sell this year in order to maximize profits?

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
A) 2 
B) 3 
C) 4 
D) 5

Question 4

An energy company has recently discovered a natural gas reserve. The company can tap this reserve at a cost of $350,000 and obtain a profit of $450,000 in three years. The current market rate is 15 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 5

Taking into account infant and child mortality, the total fertility rate that is necessary to keep a country's population from falling over time is

Accepted Answer

A) less than 1 birth per woman per lifetime. 
B) equal to about 1 birth per woman per lifetime. 
C) equal to about 1.5 births per woman per lifetime. 
D) slightly more than 2 births per woman per lifetime. 
A) less than 1 birth per woman per lifetime. 
B) equal to about 1 birth per woman per lifetime. 
C) equal to about 1.5 births per woman per lifetime. 
D) slightly more than 2 births per woman per lifetime.

Question 6

In his Essay on the Principles of Population, Thomas Malthus argued that

Accepted Answer

A) human living standards could permanently rise above subsistence levels, so that populations would grow exponentially. 
B) any increase in living standards would be temporary because people will have more children and increase the population, thus bringing living standards back down. 
C) as the population increases, the standard of living would grow as well because of rising productivity. 
D) as economic efficiency declined, standards of living would first fall and then eventually rise as the population starts increasing. 
A) human living standards could permanently rise above subsistence levels, so that populations would grow exponentially. 
B) any increase in living standards would be temporary because people will have more children and increase the population, thus bringing living standards back down. 
C) as the population increases, the standard of living would grow as well because of rising productivity. 
D) as economic efficiency declined, standards of living would first fall and then eventually rise as the population starts increasing.

Question 7

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 8

When the benefits of conservation and future use are excluded from a cost-benefit analysis, there is a tendency to

Accepted Answer

A) more efficiently allocate resources. 
B) overvalue future resources by considering them "priceless." 
C) stop resource extraction. 
D) extract and use resources as quickly as possible. 
A) more efficiently allocate resources. 
B) overvalue future resources by considering them "priceless." 
C) stop resource extraction. 
D) extract and use resources as quickly as possible.

Question 9

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 10

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 no explicit property right is given over the forest land, then

Accepted Answer

A) a property right will be established when trees are cut down and brought to market. 
B) there is no property right over the harvested timber. 
C) Alex and Belle will likely work out an agreement on harvesting and replanting the land. 
D) that implies that government owns and regulates its use. 
A) a property right will be established when trees are cut down and brought to market. 
B) there is no property right over the harvested timber. 
C) Alex and Belle will likely work out an agreement on harvesting and replanting the land. 
D) that implies that government owns and regulates its use.

Question 11

One of the world's greatest economic challenges over the coming decades will be to supply the resources that will be demanded as living standards in poorer countries rise to rich-country standards.

Accepted Answer

A) True 
 B)False

Question 12

A fishery is a stock of fish or other marine animal thought of as a logically distinct group and usually identified by its location and species.

Accepted Answer

A) True 
 B)False

Question 13

If property rights are weak or uncertain, resource extraction will tend to

Accepted Answer

A) occur faster than the rate that would maximize the long-run stream of profits. 
B) occur slower than the rate that would maximize the long-run stream of profits. 
C) occur at the rate that would maximize the long-run stream of profits. 
D) stop. 
A) occur faster than the rate that would maximize the long-run stream of profits. 
B) occur slower than the rate that would maximize the long-run stream of profits. 
C) occur at the rate that would maximize the long-run stream of profits. 
D) stop.

Question 14

In countries like Botswana and Zimbabwe, local villages have been given property rights over local elephants with the result that elephant populations

Accepted Answer

A) have been decimated as villagers try to maximize short-run profit. 
B) have grown as villagers have protected the elephants to support their tourist industry. 
C) have grown exponentially, with adverse environmental impacts. 
D) are in serious decline, as ivory prices have risen. 
A) have been decimated as villagers try to maximize short-run profit. 
B) have grown as villagers have protected the elephants to support their tourist industry. 
C) have grown exponentially, with adverse environmental impacts. 
D) are in serious decline, as ivory prices have risen.

Question 15

Per capita water use in the United States has steadily increased since 1973.

Accepted Answer

A) True 
 B)False

Question 16

The United States produces more than twice as much output per million BTUs of energy consumed as it did in 1950.

Accepted Answer

A) True 
 B)False

Question 17

Optimal resource allocation involves considering current and future uses, benefits, and costs.

Accepted Answer

A) True 
 B)False

Question 18

To what factors do demographers attribute the decline in birthrates? How has the economic view of children changed?

Accepted Answer

Declining birthrates are attributed to c

Question 19

The tragedy of the commons occurs primarily

Accepted Answer

A) where government subsidies are present. 
B) when incentives to preserve are strongest. 
C) where property rights are lacking. 
D) on privately held lands. 
A) where government subsidies are present. 
B) when incentives to preserve are strongest. 
C) where property rights are lacking. 
D) on privately held lands.

Question 20

Commodity-pricing data from The Economist show a dramatic long-run decline in 25 important real commodity prices from 1850 to 2019. This decline primarily occurred because the

Accepted Answer

A) demand for commodities decreased drastically. 
B) supply of commodities grew faster than demand. 
C) demand for commodities has remained stable over the years. 
D) supply of commodities increased, while demand increased even more. 
A) demand for commodities decreased drastically. 
B) supply of commodities grew faster than demand. 
C) demand for commodities has remained stable over the years. 
D) supply of commodities increased, while demand increased even more.

Exam 19: Natural Resource and Energy Economics

What is the relationship between living standards and birthrates?

Linda fishes for mahi-mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ and the current market price is $13. If Linda sold her ITQ to Tessa for $4,000, society would benefit from

An energy company has recently discovered a natural gas reserve. The company can tap this reserve at a cost of $350,000 and obtain a profit of $450,000 in three years. The current market rate is 15 percent. Should the company make the investment?

Taking into account infant and child mortality, the total fertility rate that is necessary to keep a country's population from falling over time is

In his Essay on the Principles of Population, Thomas Malthus argued that

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

When the benefits of conservation and future use are excluded from a cost-benefit analysis, there is a tendency to

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

One of the world's greatest economic challenges over the coming decades will be to supply the resources that will be demanded as living standards in poorer countries rise to rich-country standards.

A fishery is a stock of fish or other marine animal thought of as a logically distinct group and usually identified by its location and species.

If property rights are weak or uncertain, resource extraction will tend to

In countries like Botswana and Zimbabwe, local villages have been given property rights over local elephants with the result that elephant populations

Per capita water use in the United States has steadily increased since 1973.

The United States produces more than twice as much output per million BTUs of energy consumed as it did in 1950.

Optimal resource allocation involves considering current and future uses, benefits, and costs.

To what factors do demographers attribute the decline in birthrates? How has the economic view of children changed?

The tragedy of the commons occurs primarily

Commodity-pricing data from The Economist show a dramatic long-run decline in 25 important real commodity prices from 1850 to 2019. This decline primarily occurred because the

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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