Question 1

Nonrenewable natural resources are fixed in supply (actually or virtually).

Accepted Answer

A) True 
 B)False

Question 2

In his Essay on the Principles of Population, Thomas Malthus argued that

Accepted Answer

A)  human living standards could permanently rise above subsistence levels, so that populations would grow exponentially. 
B)  any increase in living standards would be temporary because people will have more children and increase the population, thus bringing living standards back down. 
C)  as the population increases, the standard of living would grow as well because of rising productivity. 
D)  as economic efficiency declined, standards of living would first fall and then eventually rise as the population starts increasing. 
A)  human living standards could permanently rise above subsistence levels, so that populations would grow exponentially. 
B)  any increase in living standards would be temporary because people will have more children and increase the population, thus bringing living standards back down. 
C)  as the population increases, the standard of living would grow as well because of rising productivity. 
D)  as economic efficiency declined, standards of living would first fall and then eventually rise as the population starts increasing.

Question 3

Efficient energy usage in electricity generation often involves using a mix of energy inputs, some of which are much more expensive than others.

Accepted Answer

A) True 
 B)False

Question 4

According to Seafish.org, approximately what percentage of the world's fisheries in 2014 were overexploited?

Accepted Answer

A)  1 percent 
B)  10 percent 
C)  30 percent 
D)  50 percent 
A)  1 percent 
B)  10 percent 
C)  30 percent 
D)  50 percent

Question 5

An oil company has the opportunity to extract oil from a reserve in three years with a per barrel profit of $70 per barrel. The current market rate of interest is 4 percent. The present value of this future extraction is about

Accepted Answer

A)  $55. 
B)  $62. 
C)  $70. 
D)  $72. 
A)  $55. 
B)  $62. 
C)  $70. 
D)  $72.

Question 6

Which of the following is true about U.S. energy consumption and per capita real GDP since 1990?

Accepted Answer

A)  Per capita energy consumption and per capita real GDP have both risen. 
B)  Per capita energy consumption has fallen, while per capita real GDP has risen. 
C)  Per capita energy consumption and per capita real GDP have both fallen. 
D)  Per capita consumption of energy has been unchanged, while per capita real GDP has risen. 
A)  Per capita energy consumption and per capita real GDP have both risen. 
B)  Per capita energy consumption has fallen, while per capita real GDP has risen. 
C)  Per capita energy consumption and per capita real GDP have both fallen. 
D)  Per capita consumption of energy has been unchanged, while per capita real GDP has risen.

Question 7

If energy use per capita in developed countries had leveled off, while GDP per capita had risen, then it must mean that

Accepted Answer

A)  energy efficiency had risen. 
B)  energy efficiency had fallen. 
C)  the energy-use-to-GDP ratio had risen. 
D)  the GDP-to-energy-use ratio had fallen. 
A)  energy efficiency had risen. 
B)  energy efficiency had fallen. 
C)  the energy-use-to-GDP ratio had risen. 
D)  the GDP-to-energy-use ratio had fallen.

Question 8

A rising standard of living will

Accepted Answer

A)  necessarily reduce the population by reducing the birthrate. 
B)  increase the birthrate. 
C)  reduce the birthrate, but population may continue to grow if the death rate falls more quickly. 
D)  reduce the birthrate initially but will increase the birthrate significantly at higher levels of income as people can afford to have more children. 
A)  necessarily reduce the population by reducing the birthrate. 
B)  increase the birthrate. 
C)  reduce the birthrate, but population may continue to grow if the death rate falls more quickly. 
D)  reduce the birthrate initially but will increase the birthrate significantly at higher levels of income as people can afford to have more children.

Question 9

Russia, Australia, and France have adopted policies to encourage higher birthrates by

Accepted Answer

A)  decreasing benefits for single workers. 
B)  penalizing firms with long work hours. 
C)  mandating longer holidays and vacations. 
D)  offering monetary awards for having a child. 
A)  decreasing benefits for single workers. 
B)  penalizing firms with long work hours. 
C)  mandating longer holidays and vacations. 
D)  offering monetary awards for having a child.

Question 10

In recent years, per capita energy use in developed countries such as the United States has

Accepted Answer

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

Question 11

Total allowable catch (TAC)

Accepted Answer

A)  explicitly limits the number of days in a season that particular fish may be caught. 
B)  explicitly limits the number of boats allowed to fish in a particular area. 
C)  explicitly limits the number or tonnage of fish that can be harvested from a particular fishery. 
D)  issues tradable permits limiting the number of fish a particular fisher can catch. 
A)  explicitly limits the number of days in a season that particular fish may be caught. 
B)  explicitly limits the number of boats allowed to fish in a particular area. 
C)  explicitly limits the number or tonnage of fish that can be harvested from a particular fishery. 
D)  issues tradable permits limiting the number of fish a particular fisher can catch.

Question 12

Which of the following would cause the present optimal extraction level of a nonrenewable resource to rise?

Accepted Answer

A)  a decrease in the price of the resource 
B)  an increase in the extraction cost of the resource 
C)  a decrease in the user cost of the resource 
D)  a decrease in interest rates 
A)  a decrease in the price of the resource 
B)  an increase in the extraction cost of the resource 
C)  a decrease in the user cost of the resource 
D)  a decrease in interest rates

Question 13

Most developed countries have fertility rates less than 2.1.

Accepted Answer

A) True 
 B)False

Question 14

The key to optimally managing renewable and nonrenewable resources is to design incentive structures that

Accepted Answer

A)  reduce the costs of production to the lowest possible level. 
B)  increase the benefits from production to the highest possible level. 
C)  weigh the net benefits of current use with the net benefits of future use. 
D)  add the net benefits of current use to the net benefits of future use. 
A)  reduce the costs of production to the lowest possible level. 
B)  increase the benefits from production to the highest possible level. 
C)  weigh the net benefits of current use with the net benefits of future use. 
D)  add the net benefits of current use to the net benefits of future use.

Question 15

The total allowable catch (TAC) system differs from the individual transferable quota (ITQ) system in that

Accepted Answer

A)  TAC limits the total harvest of fish, while ITQ does not. 
B)  ITQ limits an individual fishery's harvest, but TAC does not. 
C)  TAC prevents an "individual arms race" among fisheries, whereas ITQ does not. 
D)  ITQ does not offer significant cost-saving benefits, but TAC does. 
A)  TAC limits the total harvest of fish, while ITQ does not. 
B)  ITQ limits an individual fishery's harvest, but TAC does not. 
C)  TAC prevents an "individual arms race" among fisheries, whereas ITQ does not. 
D)  ITQ does not offer significant cost-saving benefits, but TAC does.

Question 16

Solar energy, forests, fish, and oil are all examples of

Accepted Answer

A)  renewable resources. 
B)  capital resources. 
C)  tangible resources. 
D)  natural resources. 
A)  renewable resources. 
B)  capital resources. 
C)  tangible resources. 
D)  natural resources.

Question 17

Some nations are increasing the amount of land covered by forests, while others are experiencing rapid deforestation. According to economists, this is largely because

Accepted Answer

A)  different nations have different ethical views regarding treatment of the environment. 
B)  nations with increasing forest cover have poorly enforced or nonexistent property rights. 
C)  nations with declining forest cover treat forests as private property or strictly regulated government property. 
D)  nations with increasing forest cover treat forests as private property or strictly regulated government property. 
A)  different nations have different ethical views regarding treatment of the environment. 
B)  nations with increasing forest cover have poorly enforced or nonexistent property rights. 
C)  nations with declining forest cover treat forests as private property or strictly regulated government property. 
D)  nations with increasing forest cover treat forests as private property or strictly regulated government property.

Question 18

Consider an oil company that can pump oil from a reserve either this year or next year. As expected future profits decrease, the extraction quantity this year

Accepted Answer

A)  increases due to a higher user cost. 
B)  increases due to a lower user cost. 
C)  decreases due to a higher user cost. 
D)  decreases due to a lower user cost. 
A)  increases due to a higher user cost. 
B)  increases due to a lower user cost. 
C)  decreases due to a higher user cost. 
D)  decreases due to a lower user cost.

Question 19

To achieve economic efficiency in energy use, an economy

Accepted Answer

A)  often uses a variety of energy sources. 
B)  must use the single energy source in which it can achieve economies of scale. 
C)  should use all energy sources in equal proportion. 
D)  should use only domestically produced energy. 
A)  often uses a variety of energy sources. 
B)  must use the single energy source in which it can achieve economies of scale. 
C)  should use all energy sources in equal proportion. 
D)  should use only domestically produced energy.

Question 20

(Consider This) 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

Exam 19: Natural Resource and Energy Economics

Nonrenewable natural resources are fixed in supply (actually or virtually).

In his Essay on the Principles of Population, Thomas Malthus argued that

Efficient energy usage in electricity generation often involves using a mix of energy inputs, some of which are much more expensive than others.

According to Seafish.org, approximately what percentage of the world's fisheries in 2014 were overexploited?

An oil company has the opportunity to extract oil from a reserve in three years with a per barrel profit of $70 per barrel. The current market rate of interest is 4 percent. The present value of this future extraction is about

Which of the following is true about U.S. energy consumption and per capita real GDP since 1990?

If energy use per capita in developed countries had leveled off, while GDP per capita had risen, then it must mean that

A rising standard of living will

Russia, Australia, and France have adopted policies to encourage higher birthrates by

In recent years, per capita energy use in developed countries such as the United States has

Total allowable catch (TAC)

Which of the following would cause the present optimal extraction level of a nonrenewable resource to rise?

Most developed countries have fertility rates less than 2.1.

The key to optimally managing renewable and nonrenewable resources is to design incentive structures that

The total allowable catch (TAC) system differs from the individual transferable quota (ITQ) system in that

Solar energy, forests, fish, and oil are all examples of

Some nations are increasing the amount of land covered by forests, while others are experiencing rapid deforestation. According to economists, this is largely because

Consider an oil company that can pump oil from a reserve either this year or next year. As expected future profits decrease, the extraction quantity this year

To achieve economic efficiency in energy use, an economy

(Consider This) Garrett Hardin's tragedy of the commons best applies to which of the following issues?

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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