Question 1

Which of the following is a major reason to believe that we are not likely to run out of natural resources?

Accepted Answer

A) slower GDP growth rates 
B) declining birthrates 
C) more renewable resources 
D) rising mortality or death rates 
A) slower GDP growth rates 
B) declining birthrates 
C) more renewable resources 
D) rising mortality or death rates

Question 2

According to U.S. Geological Survey data from 1950 to 2015, total water use in the United States has

Accepted Answer

A) continually increased. 
B) continually decreased. 
C) increased and then leveled off. 
D) decreased and then leveled off. 
A) continually increased. 
B) continually decreased. 
C) increased and then leveled off. 
D) decreased and then leveled off.

Question 3

The graph shows the extraction costs for TX Oil Company in the first year in a situation where it will extract oil from a reserve over two years. If total costs increase and the price of oil stays at $60, then the firm will

Accepted Answer

A) extract more oil the current year. 
B) extract less oil the current year. 
C) extract less oil in the next year. 
D) make no change in oil production from one year to the next. 
A) extract more oil the current year. 
B) extract less oil the current year. 
C) extract less oil in the next year. 
D) make no change in oil production from one year to the next.

Question 4

Because wind turbines supply no energy on windless days, and solar power is only generated when the sun is up and out, one inherent problem with both wind and solar power is the

Accepted Answer

A) government subsidy problem. 
B) zero-emissions problem. 
C) energy storage problem. 
D) oil-complementarity problem. 
A) government subsidy problem. 
B) zero-emissions problem. 
C) energy storage problem. 
D) oil-complementarity problem.

Question 5

Garrett Hardin's tragedy of the commons best applies to which of the following issues?

Accepted Answer

A) fracking for oil and natural gas 
B) government subsidies for alternative energy 
C) overpopulation 
D) overfishing in international waters 
A) fracking for oil and natural gas 
B) government subsidies for alternative energy 
C) overpopulation 
D) overfishing in international waters

Question 6

ITQs generate the most efficient use of resources when everyone keeps and fills their own quotas.

Accepted Answer

A) True 
 B)False

Question 7

Unless people can benefit from conservation, there is a temptation to

Accepted Answer

A) delay resource extraction as long as possible. 
B) extract and use resources at a constant rate. 
C) extract and use resources as quickly as possible. 
D) ban the extraction of nonrenewable resources. 
A) delay resource extraction as long as possible. 
B) extract and use resources at a constant rate. 
C) extract and use resources as quickly as possible. 
D) ban the extraction of nonrenewable resources.

Question 8

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 maximum amount Melanie would be willing to pay per ton for Oli's ITQs?

Accepted Answer

A) $12. 
B) $28. 
C) $20. 
D) $40. 
A) $12. 
B) $28. 
C) $20. 
D) $40.

Question 9

A farmer discovers a natural gas reserve on his property. He can extract the natural gas for a profit of $40 per unit now, $55 per unit in one year, $57 per unit in two years, and $60 in three years. The current market rate of interest is 6 percent. When should the farmer extract the natural gas to obtain the most profit per unit in present value terms?

Accepted Answer

A) today 
B) two years 
C) three years 
D) one year 
A) today 
B) two years 
C) three years 
D) one year

Question 10

The total fertility rate of a nation is the

Accepted Answer

A) total number of children a woman in the nation is capable of having during her lifetime. 
B) average number of children a woman in the nation is capable of having during her lifetime. 
C) average number of children a woman in the nation is expected to have during her lifetime. 
D) total number of women in the nation who are expected to have children during their lifetime. 
A) total number of children a woman in the nation is capable of having during her lifetime. 
B) average number of children a woman in the nation is capable of having during her lifetime. 
C) average number of children a woman in the nation is expected to have during her lifetime. 
D) total number of women in the nation who are expected to have children during their lifetime.

Question 11

Refer to the diagram, assuming that the firm represented is operating on curve TC ₀ . A change from TC ₀ to TC ₁ could be caused by

Accepted Answer

A) a decrease in extraction costs. 
B) an increase in user costs. 
C) an increase in the price of the resource. 
D) a decrease in the price of the resource. 
A) a decrease in extraction costs. 
B) an increase in user costs. 
C) an increase in the price of the resource. 
D) a decrease in the price of the resource.

Question 12

Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each. Kara's cost per ton is $6; Kyle's cost per ton is $10. If the market price of sockeye salmon is $14 per ton, what is the maximum amount Kara would be willing to pay per ton for Kyle's ITQs?

Accepted Answer

A) $4. 
B) $6. 
C) $8. 
D) $14. 
A) $4. 
B) $6. 
C) $8. 
D) $14.

Question 13

One major reason why the survival of elephants is threatened is that

Accepted Answer

A) villages near elephants have high unemployment. 
B) governments have overtaxed elephant safaris. 
C) there is a lack of incentive for elephant preservation. 
D) the number of tourists interested in elephants has declined. 
A) villages near elephants have high unemployment. 
B) governments have overtaxed elephant safaris. 
C) there is a lack of incentive for elephant preservation. 
D) the number of tourists interested in elephants has declined.

Question 14

If a country has a total fertility rate of 4.0, then, all else equal, we would expect

Accepted Answer

A) population in that country to fall over time. 
B) population in that country to rise over time. 
C) the replacement rate to also equal 4.0. 
D) population in that country to remain stable over time. 
A) population in that country to fall over time. 
B) population in that country to rise over time. 
C) the replacement rate to also equal 4.0. 
D) population in that country to remain stable over time.

Question 15

Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each. Kara's cost per ton is $8; Kyle's cost per ton is $12. If the market price of sockeye salmon is $15 per ton, what is the minimum amount per ton that Kara would have to offer Kyle to convince him to sell Kara his ITQs?

Accepted Answer

A) $4. 
B) $5. 
C) $3. 
D) $7. 
A) $4. 
B) $5. 
C) $3. 
D) $7.

Question 16

In 2018, the countries with the highest scores on the Environmental Performance Index were

Accepted Answer

A) the United States and Tanzania. 
B) Switzerland and France. 
C) New Zealand and Latvia. 
D) Burundi and Australia. 
A) the United States and Tanzania. 
B) Switzerland and France. 
C) New Zealand and Latvia. 
D) Burundi and Australia.

Question 17

"Conflict diamonds" refer to the diamonds

Accepted Answer

A) that were stolen by the Nazis in WWII and are now reclaimed by the true owners. 
B) mined by combatants in war zones in Africa. 
C) whose authenticity is contested by experts in the industry. 
D) over which major rivals are heatedly bidding against one another in the auction markets. 
A) that were stolen by the Nazis in WWII and are now reclaimed by the true owners. 
B) mined by combatants in war zones in Africa. 
C) whose authenticity is contested by experts in the industry. 
D) over which major rivals are heatedly bidding against one another in the auction markets.

Question 18

The optimal extraction level in the present for a nonrenewable resource is

Accepted Answer

A) zero. 
B) where the market price of the resource equals the extraction cost of the last unit. 
C) where the market price of the resource equals the extraction cost of the last unit plus the user cost of the last unit. 
D) where the extraction cost of the last unit equals the user cost of the last unit. 
A) zero. 
B) where the market price of the resource equals the extraction cost of the last unit. 
C) where the market price of the resource equals the extraction cost of the last unit plus the user cost of the last unit. 
D) where the extraction cost of the last unit equals the user cost of the last unit.

Question 19

Other things equal, ethanol made from corn becomes economically viable (same or lower cost than using oil)when oil prices reach _____ or more per barrel.

Accepted Answer

A) $80 
B) $60 
C) $110 
D) $127 
A) $80 
B) $60 
C) $110 
D) $127

Question 20

Total allowable catch policies and individual transferable quotas both

Accepted Answer

A) limit catch sizes and promote efficiency. 
B) limit catch sizes, but TACs promote inefficiency. 
C) promote efficiency, but only TACs limit catch sizes. 
D) promote efficiency, but only ITQs limit catch sizes. 
A) limit catch sizes and promote efficiency. 
B) limit catch sizes, but TACs promote inefficiency. 
C) promote efficiency, but only TACs limit catch sizes. 
D) promote efficiency, but only ITQs limit catch sizes.

Exam 19: Natural Resource and Energy Economics

Which of the following is a major reason to believe that we are not likely to run out of natural resources?

According to U.S. Geological Survey data from 1950 to 2015, total water use in the United States has

The graph shows the extraction costs for TX Oil Company in the first year in a situation where it will extract oil from a reserve over two years. If total costs increase and the price of oil stays at $60, then the firm will

Because wind turbines supply no energy on windless days, and solar power is only generated when the sun is up and out, one inherent problem with both wind and solar power is the

Garrett Hardin's tragedy of the commons best applies to which of the following issues?

ITQs generate the most efficient use of resources when everyone keeps and fills their own quotas.

Unless people can benefit from conservation, there is a temptation to

The total fertility rate of a nation is the

Refer to the diagram, assuming that the firm represented is operating on curve TC ₀ . A change from TC ₀ to TC ₁ could be caused by

One major reason why the survival of elephants is threatened is that

If a country has a total fertility rate of 4.0, then, all else equal, we would expect

In 2018, the countries with the highest scores on the Environmental Performance Index were

"Conflict diamonds" refer to the diamonds

The optimal extraction level in the present for a nonrenewable resource is

Other things equal, ethanol made from corn becomes economically viable (same or lower cost than using oil)when oil prices reach _____ or more per barrel.

Total allowable catch policies and individual transferable quotas both

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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