Question 1

Renewable natural resources can never be exhausted.

Accepted Answer

A) True 
 B)False

Question 2

The user cost of a resource is the market price paid by the buyer of the resource.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The total fertility rate

Accepted Answer

A)  measures the average number of children that a woman is expected to have during her lifetime. 
B)  exceeds the replacement rate in countries with a falling population. 
C)  equals the rate of population change over time. 
D)  rises as income rises. 
A)  measures the average number of children that a woman is expected to have during her lifetime. 
B)  exceeds the replacement rate in countries with a falling population. 
C)  equals the rate of population change over time. 
D)  rises as income rises.

Question 5

The world's population increased so rapidly from 1800 to the present day because of higher

Accepted Answer

A)  birthrates and lower standards of living. 
B)  standards of living and higher birthrates. 
C)  standards of living and lower death rates. 
D)  death rates and higher standards of living. 
A)  birthrates and lower standards of living. 
B)  standards of living and higher birthrates. 
C)  standards of living and lower death rates. 
D)  death rates and higher standards of living.

Question 6

Mining of "conflict diamonds" tends to

Accepted Answer

A)  be more profitable, as warring factions are willing to pay more for the diamonds. 
B)  occur at a slower pace than would maximize the long-term stream of profits because war increases extraction costs. 
C)  occur at a pace slower than would maximize the long-term stream of profits since the war disrupts production. 
D) occur at a pace faster than would maximize the long-term stream of profits since warring factions extract diamonds as quickly as possible due to fears that they may soon lose control of the diamond mines. 
A)  be more profitable, as warring factions are willing to pay more for the diamonds. 
B)  occur at a slower pace than would maximize the long-term stream of profits because war increases extraction costs. 
C)  occur at a pace slower than would maximize the long-term stream of profits since the war disrupts production. 
D) occur at a pace faster than would maximize the long-term stream of profits since warring factions extract diamonds as quickly as possible due to fears that they may soon lose control of the diamond mines.

Question 7

An example of a renewable resource would be

Accepted Answer

A)  oil. 
B)  coal. 
C)  iron ore. 
D)  aquifers. 
A)  oil. 
B)  coal. 
C)  iron ore. 
D)  aquifers.

Question 8

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 9

In fisheries management, ITQ stands for

Accepted Answer

A)  international transferable quota. 
B)  individual transferable quota. 
C)  international tuna quotas. 
D)  individual trolling quotas. 
A)  international transferable quota. 
B)  individual transferable quota. 
C)  international tuna quotas. 
D)  individual trolling quotas.

Question 10

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.

Question 11

Linda fishes for mahi mahi at a cost of $10 per ton, while Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ, and the current market price is $13 per ton. If Linda offered to sell her ITQ to Tessa for $3,000, she and Tessa would

Accepted Answer

A)  make the sale because they're both better off. 
B)  not make the sale, because Linda is better off and Tessa is not. 
C)  not make the sale, because Tessa is better of and Linda is not. 
D)  not make the sale, because neither is better off. 
A)  make the sale because they're both better off. 
B)  not make the sale, because Linda is better off and Tessa is not. 
C)  not make the sale, because Tessa is better of and Linda is not. 
D)  not make the sale, because neither is better off.

Question 12

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 13

What is a tradable fishing limit that gives the holder the right to harvest a given quantity of fish during a given time period?

Accepted Answer

A)  replacement rate 
B)  total allowable catch 
C)  individual transferable quota 
D)  government-approved fishing license 
A)  replacement rate 
B)  total allowable catch 
C)  individual transferable quota 
D)  government-approved fishing license

Question 14

Property rights for fish from the open ocean

Accepted Answer

A)  do not exist. 
B)  are established by the United Nations. 
C)  exist once the fish are sold at market. 
D)  exist once the fish are caught. 
A)  do not exist. 
B)  are established by the United Nations. 
C)  exist once the fish are sold at market. 
D)  exist once the fish are caught.

Question 15

Commercially run forestry companies have the most profit incentive to harvest trees from a forest

Accepted Answer

A)  early in the forest growth cycle. 
B)  in the middle of the forest growth cycle. 
C)  before the trees are fully mature. 
D)  after the trees can no longer grow. 
A)  early in the forest growth cycle. 
B)  in the middle of the forest growth cycle. 
C)  before the trees are fully mature. 
D)  after the trees can no longer grow.

Question 16

Energy efficiency requires that we employ

Accepted Answer

A)  only the lowest-cost energy inputs. 
B)  only domestic energy sources. 
C)  a mix of energy inputs, some of which are more expensive than others. 
D)  imported energy inputs and save domestic resources for future use. 
A)  only the lowest-cost energy inputs. 
B)  only domestic energy sources. 
C)  a mix of energy inputs, some of which are more expensive than others. 
D)  imported energy inputs and save domestic resources for future use.

Question 17

The "replacement rate" is the birthrate necessary to

Accepted Answer

A)  keep a nation's population from decreasing. 
B)  keep an able-bodied workforce in the economy. 
C)  maintain the productivity level in an economy. 
D)  maintain the standard of living of a nation. 
A)  keep a nation's population from decreasing. 
B)  keep an able-bodied workforce in the economy. 
C)  maintain the productivity level in an economy. 
D)  maintain the standard of living of a nation.

Question 18

Thomas Malthus argued that increases in living standards tend to reduce birthrates.

Accepted Answer

A) True 
 B)False

Question 19

A fishery collapse

Accepted Answer

A)  necessarily happens when harvesting rates increase. 
B)  necessarily happens when reproduction rates fall. 
C)  occurs when harvesting outpaces reproduction for an extended period. 
D)  is irreversible. 
A)  necessarily happens when harvesting rates increase. 
B)  necessarily happens when reproduction rates fall. 
C)  occurs when harvesting outpaces reproduction for an extended period. 
D)  is irreversible.

Question 20

From 1950 to 2014, according to data from the U.S. Energy Information Administration, the ratio of real GDP to energy consumption in the United States has been

Accepted Answer

A)  relatively constant. 
B)  slowly decreasing. 
C)  decreasing steeply. 
D)  rising significantly. 
A)  relatively constant. 
B)  slowly decreasing. 
C)  decreasing steeply. 
D)  rising significantly.

Exam 19: Natural Resource and Energy Economics

Renewable natural resources can never be exhausted.

The user cost of a resource is the market price paid by the buyer of the resource.

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

The total fertility rate

The world's population increased so rapidly from 1800 to the present day because of higher

Mining of "conflict diamonds" tends to

An example of a renewable resource would be

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

In fisheries management, ITQ stands for

Total allowable catch policies and individual transferable quotas both

Linda fishes for mahi mahi at a cost of $10 per ton, while Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ, and the current market price is $13 per ton. If Linda offered to sell her ITQ to Tessa for $3,000, she and Tessa would

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

What is a tradable fishing limit that gives the holder the right to harvest a given quantity of fish during a given time period?

Property rights for fish from the open ocean

Commercially run forestry companies have the most profit incentive to harvest trees from a forest

Energy efficiency requires that we employ

The "replacement rate" is the birthrate necessary to

Thomas Malthus argued that increases in living standards tend to reduce birthrates.

A fishery collapse

From 1950 to 2014, according to data from the U.S. Energy Information Administration, the ratio of real GDP to energy consumption in the United States has been

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role 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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