Question 1

Future shortages in natural resource markets are not expected to occur widely due to

Accepted Answer

A)  reduced hours at work. 
B)  reduced population growth. 
C)  higher standards of living. 
D)  higher per capita consumption. 
A)  reduced hours at work. 
B)  reduced population growth. 
C)  higher standards of living. 
D)  higher per capita consumption.

Question 2

According to data from the UN Food and Agriculture Organization, from 2010 to 2015 the amount of land worldwide that's covered by forests

Accepted Answer

A)  expanded by about 5 percent. 
B)  stayed roughly constant. 
C)  shrank by about 3 percent. 
D)  shrank by about 12 percent. 
A)  expanded by about 5 percent. 
B)  stayed roughly constant. 
C)  shrank by about 3 percent. 
D)  shrank by about 12 percent.

Question 3

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?

Accepted Answer

A)  Yes, the future value of the profit is greater than the present value of the cost. 
B)  No, the future value of the profit is less than the present value of the cost. 
C)  Yes, the present value of the profit is greater than the present value of the cost. 
D)  No, the present value of the profit is less than the present value of the cost. 
A)  Yes, the future value of the profit is greater than the present value of the cost. 
B)  No, the future value of the profit is less than the present value of the cost. 
C)  Yes, the present value of the profit is greater than the present value of the cost. 
D)  No, the present value of the profit is less than the present value of the cost.

Question 4

Data from the U.S. Energy Information Administration on per capita energy consumption in the United States for the 65-year period 1945-2014 show that it has

Accepted Answer

A)  continually increased. 
B)  continually decreased. 
C)  increased, leveled off, and started declining. 
D)  decreased, leveled off, and started rising. 
A)  continually increased. 
B)  continually decreased. 
C)  increased, leveled off, and started declining. 
D)  decreased, leveled off, and started rising.

Question 5

Studies by economists indicate that economic growth and rising living standards are good for the environment because, as societies get richer, they tend to spend more on things that improve environmental quality.

Accepted Answer

A) True 
 B)False

Question 6

Property rights over fish in the open ocean exist once the fish are caught.

Accepted Answer

A) True 
 B)False

Question 7

Higher user costs imply that a resource should be extracted more quickly.

Accepted Answer

A) True 
 B)False

Question 8

(Consider This) Which of the following must occur for wind and solar power to displace coal and gas?

Accepted Answer

A)  Wind and solar producers must reduce the marginal cost of energy storage to below the marginal cost of using coal and gas. 
B)  Government must continue to subsidize wind and solar power and heavily tax energy generated using coal and gas. 
C)  Wind and solar producers must improve the ability of turbines and solar panels to generate power. 
D)  Government must require that all wind and solar power plants be located in windy and sunny places, respectively. 
A)  Wind and solar producers must reduce the marginal cost of energy storage to below the marginal cost of using coal and gas. 
B)  Government must continue to subsidize wind and solar power and heavily tax energy generated using coal and gas. 
C)  Wind and solar producers must improve the ability of turbines and solar panels to generate power. 
D)  Government must require that all wind and solar power plants be located in windy and sunny places, respectively.

Question 9

Productive inputs that are actually or virtually fixed in supply are known as

Accepted Answer

A)  renewable natural resources. 
B)  natural capital. 
C)  nonrenewable natural resources. 
D)  alternative fuels. 
A)  renewable natural resources. 
B)  natural capital. 
C)  nonrenewable natural resources. 
D)  alternative fuels.

Question 10

A total fertility rate of 1.0 will cause the

Accepted Answer

A)  population to remain stable. 
B)  population to double in one generation. 
C)  population to collapse in one generation. 
D)  next generation to be half the size of the current generation. 
A)  population to remain stable. 
B)  population to double in one generation. 
C)  population to collapse in one generation. 
D)  next generation to be half the size of the current generation.

Question 11

Linda fishes for mahi mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ and the current market price is $13. If Linda sold her ITQ to Tessa for $4,000, society would benefit from

Accepted Answer

A)  more fish being caught. 
B)  less fish being caught. 
C)  an efficiency savings in fishing costs of $2,000. 
D)  an efficiency savings in fishing costs of $5,000. 
A)  more fish being caught. 
B)  less fish being caught. 
C)  an efficiency savings in fishing costs of $2,000. 
D)  an efficiency savings in fishing costs of $5,000.

Question 12

About what minimum price per barrel of oil is necessary for biodiesel to become economically viable as an alternative energy source?

Accepted Answer

A)  $30 per barrel 
B)  $50 per barrel 
C)  $100 per barrel 
D)  $80 per barrel 
A)  $30 per barrel 
B)  $50 per barrel 
C)  $100 per barrel 
D)  $80 per barrel

Question 13

Power plants with the lowest operating costs tend to

Accepted Answer

A)  have the lowest fixed costs in terms of construction. 
B)  have the highest fixed costs in terms of construction. 
C)  operate on the smallest scale of energy production. 
D)  generate the cleanest energy. 
A)  have the lowest fixed costs in terms of construction. 
B)  have the highest fixed costs in terms of construction. 
C)  operate on the smallest scale of energy production. 
D)  generate the cleanest energy.

Question 14

Which one of the following is a correct description of the relationship between the price of oil and the production of alternative energy sources?

Accepted Answer

A)  As the price of oil falls, the production of alternative energy sources rises. 
B)  As the price of oil rises, the production of alternative energy sources falls. 
C)  As the price of oil rises, the production of alternative energy sources rises. 
D)  As the price of oil falls, the production of alternative energy sources stays the same. 
A)  As the price of oil falls, the production of alternative energy sources rises. 
B)  As the price of oil rises, the production of alternative energy sources falls. 
C)  As the price of oil rises, the production of alternative energy sources rises. 
D)  As the price of oil falls, the production of alternative energy sources stays the same.

Question 15

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

Accepted Answer

A)  more fish being caught. 
B)  less fish being caught. 
C)  an efficiency savings in fishing costs of $2,000. 
D)  an efficiency savings in fishing costs of $5,000. 
A)  more fish being caught. 
B)  less fish being caught. 
C)  an efficiency savings in fishing costs of $2,000. 
D)  an efficiency savings in fishing costs of $5,000.

Question 16

An oil producer discovers an oil supply in Texas that can be pumped for a profit of $50 per barrel now, $60 per barrel in three years, $80 per barrel in five years, or $90 a barrel in seven years. The current market rate of interest is 3 percent. When should the oil producer extract the oil to obtain the most profit per barrel in present value terms?

Accepted Answer

A)  today 
B)  three years 
C)  five years 
D)  seven years 
A)  today 
B)  three years 
C)  five years 
D)  seven years

Question 17

Resource demand has grown over time

Accepted Answer

A)  because of population growth only. 
B)  because of increased consumption per person only. 
C)  because of both increased population and greater consumption per person. 
D)  despite decreases in population and consumption per person. 
A)  because of population growth only. 
B)  because of increased consumption per person only. 
C)  because of both increased population and greater consumption per person. 
D)  despite decreases in population and consumption per person.

Question 18

Consider a coal mining company that can mine coal this year or next year. As expected future profits increase, 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

An increasing ratio of real GDP to BTU of energy consumption suggests that

Accepted Answer

A)  increased energy consumption led to increased energy production. 
B)  increased energy production led to increased energy consumption. 
C)  the discovery of energy sources greatly increased energy supply. 
D)  advances in technology greatly increased energy efficiency. 
A)  increased energy consumption led to increased energy production. 
B)  increased energy production led to increased energy consumption. 
C)  the discovery of energy sources greatly increased energy supply. 
D)  advances in technology greatly increased energy efficiency.

Question 20

Alex and Ben are both loggers wanting to harvest timber from the same forest. Alex prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees as possible to maximize short-run profit and then move on. They face the same production costs. The forest is more likely to be harvested and replanted at a sustainable rate if

Accepted Answer

A)  property rights are well defined and enforced. 
B)  property rights are weak or nonexistent. 
C)  there is no government protection of property rights and the parties can negotiate a settlement. 
D)  Ben is given sole ownership of the property. 
A)  property rights are well defined and enforced. 
B)  property rights are weak or nonexistent. 
C)  there is no government protection of property rights and the parties can negotiate a settlement. 
D)  Ben is given sole ownership of the property.

Exam 19: Natural Resource and Energy Economics

Future shortages in natural resource markets are not expected to occur widely due to

According to data from the UN Food and Agriculture Organization, from 2010 to 2015 the amount of land worldwide that's covered by forests

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?

Data from the U.S. Energy Information Administration on per capita energy consumption in the United States for the 65-year period 1945-2014 show that it has

Studies by economists indicate that economic growth and rising living standards are good for the environment because, as societies get richer, they tend to spend more on things that improve environmental quality.

Property rights over fish in the open ocean exist once the fish are caught.

Higher user costs imply that a resource should be extracted more quickly.

(Consider This) Which of the following must occur for wind and solar power to displace coal and gas?

Productive inputs that are actually or virtually fixed in supply are known as

A total fertility rate of 1.0 will cause the

Linda fishes for mahi mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ and the current market price is $13. If Linda sold her ITQ to Tessa for $4,000, society would benefit from

About what minimum price per barrel of oil is necessary for biodiesel to become economically viable as an alternative energy source?

Power plants with the lowest operating costs tend to

Which one of the following is a correct description of the relationship between the price of oil and the production of alternative energy sources?

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

Resource demand has grown over time

Consider a coal mining company that can mine coal this year or next year. As expected future profits increase, the extraction quantity this year

An increasing ratio of real GDP to BTU of energy consumption suggests that

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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