Question 1

Forests in the United States have,in recent decades,

Accepted Answer

A) expanded substantially in the amount of wood grown. 
B) been steadily declining in acreage and in wood produced. 
C) been cut and cleared at a faster and faster rate. 
D) shown no trend in growth or shrinkage. 
A) expanded substantially in the amount of wood grown. 
B) been steadily declining in acreage and in wood produced. 
C) been cut and cleared at a faster and faster rate. 
D) shown no trend in growth or shrinkage.

Question 2

According to water resource economists

Accepted Answer

A) water is seldom in short supply anywhere in the world. 
B) we are not running out of water,but specific places do run short of water,given the status of their water supply arrangements and ease (or lack of)transferability of water among users. 
C) the world is running out of water,just as it is running out of accessible oil. 
D) there is no workable way to make water markets function properly,because in the end,we can't make more water the way we can make more bread or automobiles. 
A) water is seldom in short supply anywhere in the world. 
B) we are not running out of water,but specific places do run short of water,given the status of their water supply arrangements and ease (or lack of)transferability of water among users. 
C) the world is running out of water,just as it is running out of accessible oil. 
D) there is no workable way to make water markets function properly,because in the end,we can't make more water the way we can make more bread or automobiles.

Question 3

Predictions that natural resources such as oil will be essentially used up in the next few decades

Accepted Answer

A) have been frequently made for the past century but have always proven to be false. 
B) have usually been based on the quantity of proved reserves. 
C) have ignored the role of price in governing the quantities demanded and supplied. 
D) All of the above are correct. 
A) have been frequently made for the past century but have always proven to be false. 
B) have usually been based on the quantity of proved reserves. 
C) have ignored the role of price in governing the quantities demanded and supplied. 
D) All of the above are correct.

Question 4

If proved reserves of a mineral amount to twelve years of use at the current rate of consumption,

Accepted Answer

A) it is likely,though not certain,that we will run out of that mineral in about twelve years. 
B) we are likely to run out of the mineral in less than twelve years if our rate of use has been increasing. 
C) if the good becomes more scarce relative to supply in the future,its price will rise and thereby encourage both conservation and exploration. 
D) if proved reserves diminish,lower prices will extend the day of exhaustion well into the future. 
A) it is likely,though not certain,that we will run out of that mineral in about twelve years. 
B) we are likely to run out of the mineral in less than twelve years if our rate of use has been increasing. 
C) if the good becomes more scarce relative to supply in the future,its price will rise and thereby encourage both conservation and exploration. 
D) if proved reserves diminish,lower prices will extend the day of exhaustion well into the future.

Question 5

While the price of a resource may increase sharply during some periods,the structure of ____ accompanying the price increase makes depletion highly unlikely and provides the seeds for future reversal.

Accepted Answer

A) government programs 
B) foreign competition 
C) incentives 
D) taxation 
A) government programs 
B) foreign competition 
C) incentives 
D) taxation

Question 6

Technological advances in agriculture (such as chemical fertilizers and harvesting equipment)have helped to preserve and grow forest land because they

Accepted Answer

A) reduce the amount of land needed to grow food. 
B) result in a larger population. 
C) are made from timber. 
D) None of the above. 
A) reduce the amount of land needed to grow food. 
B) result in a larger population. 
C) are made from timber. 
D) None of the above.

Question 7

Water,when it is not tradeable among current and potential users,is often kept that way

Accepted Answer

A) by governments who demand tight controls on who gets the water. 
B) by nature,as water cannot be easily moved from place to place in large quantities. 
C) to protect fish and other wildlife,rather than for any other reason. 
D) by monopoly owners in the private sector. 
A) by governments who demand tight controls on who gets the water. 
B) by nature,as water cannot be easily moved from place to place in large quantities. 
C) to protect fish and other wildlife,rather than for any other reason. 
D) by monopoly owners in the private sector.

Question 8

"If China and India continue their economic expansion,the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement.

Accepted Answer

A) True,increased demand from developing countries will swamp the existing supply of resources. 
B) True,increased demand from China and India will lead to large shortages in the North America and Europe. 
C) False,the shortage will be limited to China and India. 
D) False,increasing scarcity will result in higher prices and the deployment of new technologies that increase the efficiency of production,and together these markets forces will help to balance demand and supply worldwide. 
A) True,increased demand from developing countries will swamp the existing supply of resources. 
B) True,increased demand from China and India will lead to large shortages in the North America and Europe. 
C) False,the shortage will be limited to China and India. 
D) False,increasing scarcity will result in higher prices and the deployment of new technologies that increase the efficiency of production,and together these markets forces will help to balance demand and supply worldwide.

Question 9

The classic resource study of Barnett and Morse found that

Accepted Answer

A) resource costs have been rising at such a rate that,within fifty years,the prices of most natural resources will be exorbitant. 
B) the current proved reserves of most minerals are becoming perilously low. 
C) resource prices declined between 1870 and 1920,but since 1920 the relative price of natural resources has been increasing at an annual rate of approximately 3.5 percent. 
D) technology and developing substitutes outran our use of scarce natural resources during the last century,so that relative resource prices have declined. 
A) resource costs have been rising at such a rate that,within fifty years,the prices of most natural resources will be exorbitant. 
B) the current proved reserves of most minerals are becoming perilously low. 
C) resource prices declined between 1870 and 1920,but since 1920 the relative price of natural resources has been increasing at an annual rate of approximately 3.5 percent. 
D) technology and developing substitutes outran our use of scarce natural resources during the last century,so that relative resource prices have declined.

Question 10

Doomsday projections have generally

Accepted Answer

A) been correct. 
B) been incorrect,but with better technology and the ability to predict the future,these forecasts have become much more accurate in the last few decades. 
C) been inconsistent.Some projections came true,others failed. 
D) been wrong. 
A) been correct. 
B) been incorrect,but with better technology and the ability to predict the future,these forecasts have become much more accurate in the last few decades. 
C) been inconsistent.Some projections came true,others failed. 
D) been wrong.

Question 11

How are the economic forces that govern renewable resources different than those that govern non-renewable resources?

Accepted Answer

A) Non-renewable resources must be protected by government policies to prevent depletion. 
B) Once non-renewable resources are used up they are gone forever. 
C) Both renewable and non-renewable resources have become scarcer over time so the economic forces at work are the same. 
D) Renewable resources are not subject to the laws of economics since the scarcity condition no longer holds. 
A) Non-renewable resources must be protected by government policies to prevent depletion. 
B) Once non-renewable resources are used up they are gone forever. 
C) Both renewable and non-renewable resources have become scarcer over time so the economic forces at work are the same. 
D) Renewable resources are not subject to the laws of economics since the scarcity condition no longer holds.

Question 12

Predictions of severe shortages due to impending natural resource depletion

Accepted Answer

A) are widely accepted by resource economists even though such predictions are a relatively new occurrence. 
B) have been wrong in the past,but most resource economists believe that the threat of resource depletion is now far more severe than ever before. 
C) are typically made without adequate recognition and consideration of resource price elasticities. 
D) typically assume that price elasticities are greater than they really are. 
A) are widely accepted by resource economists even though such predictions are a relatively new occurrence. 
B) have been wrong in the past,but most resource economists believe that the threat of resource depletion is now far more severe than ever before. 
C) are typically made without adequate recognition and consideration of resource price elasticities. 
D) typically assume that price elasticities are greater than they really are.

Question 13

When water cannot be traded among current and potential users,then

Accepted Answer

A) each user will take more care to conserve,because added water cannot be obtained. 
B) users have a strong incentive to conserve because they are now protected from price increases imposed by greedy entrepreneurs. 
C) efficiency improves,as dry years can be better anticipated and planned for,and every user knows the quantity that will be available. 
D) water will not flow to its highest valued uses,and some users will use water for relatively low-valued uses,because they cannot gain by selling it to others. 
A) each user will take more care to conserve,because added water cannot be obtained. 
B) users have a strong incentive to conserve because they are now protected from price increases imposed by greedy entrepreneurs. 
C) efficiency improves,as dry years can be better anticipated and planned for,and every user knows the quantity that will be available. 
D) water will not flow to its highest valued uses,and some users will use water for relatively low-valued uses,because they cannot gain by selling it to others.

Question 14

Proved reserves are likely to underestimate the total quantity of the resource in the ground because

Accepted Answer

A) of flaws in information flows between countries. 
B) government agencies have an incentive to keep reserves secret. 
C) of future improvements in technology and higher future prices. 
D) scientists have not been able to use the latest techniques to estimate reserves in less developed countries. 
A) of flaws in information flows between countries. 
B) government agencies have an incentive to keep reserves secret. 
C) of future improvements in technology and higher future prices. 
D) scientists have not been able to use the latest techniques to estimate reserves in less developed countries.

Question 15

Doomsday forecasts about running out of natural resources,with dire consequences,

Accepted Answer

A) have occurred at least as far back in time as the 16th century. 
B) have generally been correct,and resources today are nearly all rising in price. 
C) seldom are taken seriously enough by the public. 
D) began to be heard for the first time after Earth Day of 1970. 
A) have occurred at least as far back in time as the 16th century. 
B) have generally been correct,and resources today are nearly all rising in price. 
C) seldom are taken seriously enough by the public. 
D) began to be heard for the first time after Earth Day of 1970.

Question 16

"Doomsday" predictions about the imminent depletion of one or more of our vital natural resources usually are

Accepted Answer

A) correct but are not reflected by relative price changes within our market economy. 
B) overstated because of arithmetic calculation mistakes. 
C) overstated because they disregard human responses to relative price changes. 
D) understated because substitutes for such natural resources are also becoming less available. 
A) correct but are not reflected by relative price changes within our market economy. 
B) overstated because of arithmetic calculation mistakes. 
C) overstated because they disregard human responses to relative price changes. 
D) understated because substitutes for such natural resources are also becoming less available.

Question 17

Researcher Indur Goklany has estimated that if traditional technologies,like those used in 1961,were still in use,other things equal,wildlife habitat

Accepted Answer

A) would be more abundant and far healthier today. 
B) would have increased,benefiting wildlife substantially. 
C) would have declined substantially,as the need for farmland would not have declined as it did. 
D) would have been unaffected. 
A) would be more abundant and far healthier today. 
B) would have increased,benefiting wildlife substantially. 
C) would have declined substantially,as the need for farmland would not have declined as it did. 
D) would have been unaffected.

Question 18

The concept of "proved reserves" refers to the amount of a resource that can be produced

Accepted Answer

A) in one year's time. 
B) in the next 10 years. 
C) before it runs out. 
D) at current levels of expected prices and technology. 
A) in one year's time. 
B) in the next 10 years. 
C) before it runs out. 
D) at current levels of expected prices and technology.

Question 19

Why do water supply problems exist in many parts of the world?

Accepted Answer

A) Efforts to build large-scale reservoirs in arid countries have stalled due to the enormous expense involved in completing these projects. 
B) Water markets are missing or incomplete. 
C) Global warming has increased the evaporation rate of water by over 10%. 
D) The water supply is unfit for public consumption in many areas due to pollution. 
A) Efforts to build large-scale reservoirs in arid countries have stalled due to the enormous expense involved in completing these projects. 
B) Water markets are missing or incomplete. 
C) Global warming has increased the evaporation rate of water by over 10%. 
D) The water supply is unfit for public consumption in many areas due to pollution.

Question 20

Empirical evidence suggests that the relative scarcity of most resources is

Accepted Answer

A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged over the past four decades. 
A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged over the past four decades.

Exam 41: The Question of Resource Exhaustion

Forests in the United States have,in recent decades,

According to water resource economists

Predictions that natural resources such as oil will be essentially used up in the next few decades

If proved reserves of a mineral amount to twelve years of use at the current rate of consumption,

While the price of a resource may increase sharply during some periods,the structure of ____ accompanying the price increase makes depletion highly unlikely and provides the seeds for future reversal.

Technological advances in agriculture (such as chemical fertilizers and harvesting equipment)have helped to preserve and grow forest land because they

Water,when it is not tradeable among current and potential users,is often kept that way

"If China and India continue their economic expansion,the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement.

The classic resource study of Barnett and Morse found that

Doomsday projections have generally

How are the economic forces that govern renewable resources different than those that govern non-renewable resources?

Predictions of severe shortages due to impending natural resource depletion

When water cannot be traded among current and potential users,then

Proved reserves are likely to underestimate the total quantity of the resource in the ground because

Doomsday forecasts about running out of natural resources,with dire consequences,

"Doomsday" predictions about the imminent depletion of one or more of our vital natural resources usually are

Researcher Indur Goklany has estimated that if traditional technologies,like those used in 1961,were still in use,other things equal,wildlife habitat

The concept of "proved reserves" refers to the amount of a resource that can be produced

Why do water supply problems exist in many parts of the world?

Empirical evidence suggests that the relative scarcity of most resources is

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

Filters