Question 1

Which of the following statements is true about the demand for and/or the supply of natural resources?

Accepted Answer

A) The supply curve for natural resources is more elastic in the long run than in the short run. 
B) The elasticity of demand for electricity,natural gas,and gasoline equals approximately 0.1 in both the short run and the long run. 
C) Natural resources are demanded by consumers and producers in steadily growing amounts,so future shortages are inevitable. 
D) The supply of many natural resources is finite;thus the long-run elasticity of supply must be zero. 
A) The supply curve for natural resources is more elastic in the long run than in the short run. 
B) The elasticity of demand for electricity,natural gas,and gasoline equals approximately 0.1 in both the short run and the long run. 
C) Natural resources are demanded by consumers and producers in steadily growing amounts,so future shortages are inevitable. 
D) The supply of many natural resources is finite;thus the long-run elasticity of supply must be zero. A

Question 2

Proved reserves of natural gas and oil

Accepted Answer

A) will last only another five years at the current worldwide consumption rate. 
B) reveal little about whether the world is about to run out of these resources since they are calculated at present levels of price and technology. 
C) are just another way of measuring how many years civilization will continue. 
D) indicate that the supply of petroleum will be depleted by the year 2020 unless governments adopt price controls and energy rationing. 
A) will last only another five years at the current worldwide consumption rate. 
B) reveal little about whether the world is about to run out of these resources since they are calculated at present levels of price and technology. 
C) are just another way of measuring how many years civilization will continue. 
D) indicate that the supply of petroleum will be depleted by the year 2020 unless governments adopt price controls and energy rationing. B

Question 3

The supply of oil for users in the United States

Accepted Answer

A) was never an issue of serious public concern until the 1970s. 
B) has never been an issue of serious concern by political leaders. 
C) has often been a topic for dire warnings and forecasts of oil depletion. 
D) has been more and more in doubt since the early 1980s. 
A) was never an issue of serious public concern until the 1970s. 
B) has never been an issue of serious concern by political leaders. 
C) has often been a topic for dire warnings and forecasts of oil depletion. 
D) has been more and more in doubt since the early 1980s. C

Question 4

Economic theory indicates that the amount consumed of a natural resource depends on

Accepted Answer

A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above. 
A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above.

Question 5

Generally,the demand for energy in the long run will be

Accepted Answer

A) approximately equal in elasticity to the demand for energy in the short run. 
B) considerably less elastic than in the short run. 
C) considerably more elastic than in the short run. 
D) perfectly inelastic because we must have energy to survive. 
A) approximately equal in elasticity to the demand for energy in the short run. 
B) considerably less elastic than in the short run. 
C) considerably more elastic than in the short run. 
D) perfectly inelastic because we must have energy to survive.

Question 6

In the petroleum industry,proved reserves are

Accepted Answer

A) evidence that uncertainty is not a problem in the industry. 
B) inevitably growing smaller over time. 
C) the same thing as the current supply of petroleum. 
D) resources recoverable at current prices and technology. 
A) evidence that uncertainty is not a problem in the industry. 
B) inevitably growing smaller over time. 
C) the same thing as the current supply of petroleum. 
D) resources recoverable at current prices and technology.

Question 7

Generally,the elasticity of demand for an energy source in the long run will be

Accepted Answer

A) approximately equal to its elasticity of demand in the short run. 
B) considerably more elastic than in the short run. 
C) slightly less elastic than in the short run. 
D) considerably less elastic than in the short run. 
A) approximately equal to its elasticity of demand in the short run. 
B) considerably more elastic than in the short run. 
C) slightly less elastic than in the short run. 
D) considerably less elastic than in the short run.

Question 8

What can be said about the demand and supply of natural resources?

Accepted Answer

A) The quantity demanded of a natural resource will generally be less responsive to a change in price in the long run than in the short run. 
B) The supply of a natural resource will generally be more responsive to a price change in the long run than in the short run. 
C) The supply of a natural resource is fixed by nature;it cannot be responsive to a price change in the long run. 
D) None of the above is correct. 
A) The quantity demanded of a natural resource will generally be less responsive to a change in price in the long run than in the short run. 
B) The supply of a natural resource will generally be more responsive to a price change in the long run than in the short run. 
C) The supply of a natural resource is fixed by nature;it cannot be responsive to a price change in the long run. 
D) None of the above is correct.

Question 9

When a highly valued resource cannot be easily traded,as is often true with water flowing in a river,then

Accepted Answer

A) it will not be hoarded by the rich,but will be available to all on an equal basis. 
B) we can expect shortages from time to time,and conflicts over access to its use. 
C) its price will be low as a result. 
D) markets in the resource will clear more easily,without greed and profit to get in the way. 
A) it will not be hoarded by the rich,but will be available to all on an equal basis. 
B) we can expect shortages from time to time,and conflicts over access to its use. 
C) its price will be low as a result. 
D) markets in the resource will clear more easily,without greed and profit to get in the way.

Question 10

Economic theory indicates that the economy is better off not to produce proved reserves of a mineral "too quickly." By this,we mean that we

Accepted Answer

A) prefer some bad luck in exploration efforts,rather than too much good luck in finding the resources. 
B) do not want the resource to be too abundantly available since this would reduce its price and GDP. 
C) want to use other nations' resources first,even if doing so is more costly. 
D) do not want to use additional resources for exploration if the present discounted value of the benefits is smaller than the cost. 
A) prefer some bad luck in exploration efforts,rather than too much good luck in finding the resources. 
B) do not want the resource to be too abundantly available since this would reduce its price and GDP. 
C) want to use other nations' resources first,even if doing so is more costly. 
D) do not want to use additional resources for exploration if the present discounted value of the benefits is smaller than the cost.

Question 11

Non-renewable resources are those that

Accepted Answer

A) are not renewed by nature,but their supply can be easily expanded by humans. 
B) are naturally renewed by nature;timber provides an example. 
C) are not renewed by nature,at a significant rate. 
D) cannot be recycled,by their very nature. 
A) are not renewed by nature,but their supply can be easily expanded by humans. 
B) are naturally renewed by nature;timber provides an example. 
C) are not renewed by nature,at a significant rate. 
D) cannot be recycled,by their very nature.

Question 12

Water supply problems are generally the result of

Accepted Answer

A) missing or incomplete markets for water. 
B) too much trading of water. 
C) too few government subsidies to desalination. 
D) all of the above. 
A) missing or incomplete markets for water. 
B) too much trading of water. 
C) too few government subsidies to desalination. 
D) all of the above.

Question 13

Supply and demand analysis suggests that a sharp increase in the price of gasoline will cause the

Accepted Answer

A) price of fuel-efficient compact cars to decrease. 
B) supply of gasoline to decrease. 
C) demand for large luxury cars to increase. 
D) demand for fuel-efficient cars to increase. 
A) price of fuel-efficient compact cars to decrease. 
B) supply of gasoline to decrease. 
C) demand for large luxury cars to increase. 
D) demand for fuel-efficient cars to increase.

Question 14

Empirical evidence suggests that the relative scarcity of most resources is

Accepted Answer

A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged. 
A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged.

Question 15

The overall trend in resource prices has been

Accepted Answer

A) upward. 
B) downward. 
C) constant. 
D) increasing exponentially. 
A) upward. 
B) downward. 
C) constant. 
D) increasing exponentially.

Question 16

Higher prices for natural resources are

Accepted Answer

A) a natural and inevitable result of resource depletion. 
B) not possible for more than a short time,as technological advances clearly guarantee falling resource prices. 
C) not the story of the last two centuries,because resource prices have decline through most of this period. 
D) the major cause of resource shortages in the world. 
A) a natural and inevitable result of resource depletion. 
B) not possible for more than a short time,as technological advances clearly guarantee falling resource prices. 
C) not the story of the last two centuries,because resource prices have decline through most of this period. 
D) the major cause of resource shortages in the world.

Question 17

When market trades in water occur,we can assume that

Accepted Answer

A) the party releasing water is the loser. 
B) the party buying water is paying too much. 
C) the trade in something as important as water is immoral. 
D) the signals and incentives flowing from the trades help many in that water market,not just the buyer and seller directly. 
A) the party releasing water is the loser. 
B) the party buying water is paying too much. 
C) the trade in something as important as water is immoral. 
D) the signals and incentives flowing from the trades help many in that water market,not just the buyer and seller directly.

Question 18

Proved reserves of petroleum are

Accepted Answer

A) the verified quantity of petroleum that can be recovered at current prices and levels of technology. 
B) the only reserves likely to be available in the future. 
C) refined products awaiting shipment to the market. 
D) the total amount of the resource in existence,regardless of the productive effort undertaken to expand the future availability of the resource. 
A) the verified quantity of petroleum that can be recovered at current prices and levels of technology. 
B) the only reserves likely to be available in the future. 
C) refined products awaiting shipment to the market. 
D) the total amount of the resource in existence,regardless of the productive effort undertaken to expand the future availability of the resource.

Question 19

The amount of a resource consumed depends on

Accepted Answer

A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above. 
A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above.

Question 20

Renewable resources are those that

Accepted Answer

A) can be renewed,but only with the use of energy resources. 
B) are constantly being renewed by nature. 
C) will inevitably run out over time,like all other resources. 
D) are not really scarce,because they are constantly renewed naturally. 
A) can be renewed,but only with the use of energy resources. 
B) are constantly being renewed by nature. 
C) will inevitably run out over time,like all other resources. 
D) are not really scarce,because they are constantly renewed naturally.

Exam 41: The Question of Resource Exhaustion

Which of the following statements is true about the demand for and/or the supply of natural resources?

Proved reserves of natural gas and oil

The supply of oil for users in the United States

Economic theory indicates that the amount consumed of a natural resource depends on

Generally,the demand for energy in the long run will be

In the petroleum industry,proved reserves are

Generally,the elasticity of demand for an energy source in the long run will be

What can be said about the demand and supply of natural resources?

When a highly valued resource cannot be easily traded,as is often true with water flowing in a river,then

Economic theory indicates that the economy is better off not to produce proved reserves of a mineral "too quickly." By this,we mean that we

Non-renewable resources are those that

Water supply problems are generally the result of

Supply and demand analysis suggests that a sharp increase in the price of gasoline will cause the

Empirical evidence suggests that the relative scarcity of most resources is

The overall trend in resource prices has been

Higher prices for natural resources are

When market trades in water occur,we can assume that

Proved reserves of petroleum are

The amount of a resource consumed depends on

Renewable resources are those that

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

Difficult Environmental Cases and the Role of Government

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