Exam 19: Natural Resource and Energy Economics

Whose An Essay on the Principle of Population argued that human living standards could only temporarily rise above subsistence?

The era after the Industrial Revolution proved that it was impossible to have improved standards of living with large population growth.

A Middle Eastern country has an oil reserve that it can extract for a profit of $60 a barrel today, $65 a barrel in two years, $70 a barrel in three years, and $75 in four years. The current market rate of interest is 7 percent. When should this country tap into its oil reserve to obtain the most profit per barrel in present value terms?

A logging company is considering logging an area for a current cost of $500 per acre to obtain a profit the next year of $600 per acre. The market rate of interest is 10 percent. Should the company make the investment?

To achieve economic efficiency in energy use, an economy

Increases in U.S. living standards have matched increases in per capita energy use.

With modernization, the world's population will continue to decline even as many countries experience declining death rates.

In fisheries management, a fishery is defined as

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 $7; Kyle's cost per ton is $11. If the market price of sockeye salmon is $16 per ton, what is the minimum amount per ton that Kara would have to offer Kyle to convince him to sell Kara his ITQs?

Per capita energy use in the United States has remained fairly constant since 1980.

The long-run total demand for commodity resources is driven by which of the following forces?

Property rights for fish from the open ocean

Overextraction of a resource in the present can occur because

As nations become richer, they tend to pollute

According to data from the UN Food and Agriculture Organization, which of the following nations had the fastest growing area of forested land in the period 2010-2015?

Weak property rights encourage faster extraction than would otherwise maximize the long-term stream of profits.

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). Suppose that a new government regulation is going to shut down OZ's mining operation one year from now. If the current price per bar of gold is $25,000, how many bars (in thousands)should OZ extract and sell this year?

A fishery collapse

Donald fishes for swordfish at a cost of $6 per ton. Ronny fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ, and the current market price is $10 per ton. If Donald sold his ITQ to Ronny for $5,000, society would benefit from

Refer to the diagram, assuming that the firm represented is operating on curve TC ₀ . If the user cost increases by $20 at the beginning of the year, the quantity extracted in the first year will