Question 1

Which of the following is considered a renewable natural resource?

Accepted Answer

A)  natural gas 
B)  copper 
C)  solar power 
D)  coal 
A)  natural gas 
B)  copper 
C)  solar power 
D)  coal

Question 2

Negative externalities from energy production should be considered when comparing the cost of an energy source, because they

Accepted Answer

A)  improve energy production. 
B)  reduce the total costs of production. 
C)  are an additional cost of using that source. 
D)  are taxed or subsidized by government to encourage production. 
A)  improve energy production. 
B)  reduce the total costs of production. 
C)  are an additional cost of using that source. 
D)  are taxed or subsidized by government to encourage production.

Question 3

At any level of a mining firm's output, total cost will be equal to extraction costs

Accepted Answer

A)  plus user costs. 
B)  minus user costs. 
C)  times user costs. 
D)  divided by user costs. 
A)  plus user costs. 
B)  minus user costs. 
C)  times user costs. 
D)  divided by user costs.

Question 4

Over the past decade, U.S. per capita consumption of water

Accepted Answer

A)  and energy have both increased. 
B)  has increased, while per capita consumption of energy has fallen. 
C)  and energy have leveled off or fallen. 
D)  has fallen, while per capita consumption of energy has increased. 
A)  and energy have both increased. 
B)  has increased, while per capita consumption of energy has fallen. 
C)  and energy have leveled off or fallen. 
D)  has fallen, while per capita consumption of energy has increased.

Question 5

What is the relationship between living standards and birthrates?

Accepted Answer

A)  The relationship is negative at low levels of income but becomes increasingly positive as incomes rise. 
B)  They are unrelated. 
C)  The relationship is positive (directly related). 
D)  The relationship is negative (inversely related). 
A)  The relationship is negative at low levels of income but becomes increasingly positive as incomes rise. 
B)  They are unrelated. 
C)  The relationship is positive (directly related). 
D)  The relationship is negative (inversely related).

Question 6

Assuming that interest rates are positive, the present value of an $80 barrel of oil in two years is less than an $80 barrel today.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not one of the points made in "Tragedy of the Commons"?

Accepted Answer

A)  Individual property rights play a crucial role in resource preservation. 
B)  Common property will tend to be overexploited. 
C)  Common property makes its users try to use as much as possible and as soon as possible. 
D)  Individual property rights tend to be tragically abused by the owners. 
A)  Individual property rights play a crucial role in resource preservation. 
B)  Common property will tend to be overexploited. 
C)  Common property makes its users try to use as much as possible and as soon as possible. 
D)  Individual property rights tend to be tragically abused by the owners.

Question 8

If property rights are weak or uncertain, resource extraction will tend to

Accepted Answer

A)  occur faster than the rate that would maximize the long-run stream of profits. 
B)  occur slower than the rate that would maximize the long-run stream of profits. 
C)  occur at the rate that would maximize the long-run stream of profits. 
D)  stop. 
A)  occur faster than the rate that would maximize the long-run stream of profits. 
B)  occur slower than the rate that would maximize the long-run stream of profits. 
C)  occur at the rate that would maximize the long-run stream of profits. 
D)  stop.

Question 9

Modernizing economies that have declining birthrates may still experience population growth because of rapidly declining death rates.

Accepted Answer

A) True 
 B)False

Question 10

If users can benefit from conservation, resources will be

Accepted Answer

A)  unprofitable. 
B)  extracted at a fast rate. 
C)  preserved for future use. 
D)  overused in the present and the future. 
A)  unprofitable. 
B)  extracted at a fast rate. 
C)  preserved for future use. 
D)  overused in the present and the future.

Question 11

ACME Corporation used to produce $50 worth of goods (in 2000 dollars) per million BTUs used. Now it produces $60 worth of goods (in 2000 dollars) per million BTUs. Based on this, we can conclude

Accepted Answer

A)  nothing about ACME's energy efficiency. 
B)  that ACME's energy efficiency has declined. 
C)  that ACME's energy efficiency has improved. 
D)  that ACME is using a single energy source and achieving economies of scale in production. 
A)  nothing about ACME's energy efficiency. 
B)  that ACME's energy efficiency has declined. 
C)  that ACME's energy efficiency has improved. 
D)  that ACME is using a single energy source and achieving economies of scale in production.

Question 12

Whose An Essay on the Principle of Population argued that human living standards could only temporarily rise above subsistence?

Accepted Answer

A)  Adam Smith 
B)  Thomas Malthus 
C)  John Maynard Keynes 
D)  Alfred Marshall 
A)  Adam Smith 
B)  Thomas Malthus 
C)  John Maynard Keynes 
D)  Alfred Marshall

Question 13

Encouraging conservation is especially difficult in the open ocean, where it is impossible to either define or enforce property rights over fish.

Accepted Answer

A) True 
 B)False

Question 14

(Last Word) According to Yale University's Environmental Performance Index (EPI),

Accepted Answer

A)  countries with lower GDP per person tend to have healthier environments. 
B)  countries with higher GDP per person tend to have healthier environments. 
C)  there is no correlation between GDP per person and environmental quality. 
D)  growth in GDP per person initially improves environmental quality and then gradually reduces it. 
A)  countries with lower GDP per person tend to have healthier environments. 
B)  countries with higher GDP per person tend to have healthier environments. 
C)  there is no correlation between GDP per person and environmental quality. 
D)  growth in GDP per person initially improves environmental quality and then gradually reduces it.

Question 15

Other things equal, extracting oil from shale becomes economically viable (same or lower cost than using conventionally extracted oil) when oil prices reach or more per barrel.

Accepted Answer

A)  $80 
B)  $60 
C)  $50 
D)  $40 
A)  $80 
B)  $60 
C)  $50 
D)  $40

Question 16

Demographers refer to this as the "demographic transition": The reduction in death rates brought about by rising standards of living "causes a temporary population explosion because parents-initially unaware that such a revolutionary change in death rates has taken place-for a while keep having six or more children-to ensure that at least two will survive to adulthood." For which major industrialized country could this statement be used to explain its current population trend?

Accepted Answer

A)  United States 
B)  Japan 
C)  India 
D)  China 
A)  United States 
B)  Japan 
C)  India 
D)  China

Question 17

The user cost of extracting a nonrenewable resource is

Accepted Answer

A)  the sum of the dollar expenditures incurred to extract the resource. 
B)  the cost of not being able to extract it in the future if it is extracted and sold in the present. 
C)  the selling price of the resource to the companies using it to produce goods and services. 
D)  directly proportional to how much of the nonrenewable resource remains. 
A)  the sum of the dollar expenditures incurred to extract the resource. 
B)  the cost of not being able to extract it in the future if it is extracted and sold in the present. 
C)  the selling price of the resource to the companies using it to produce goods and services. 
D)  directly proportional to how much of the nonrenewable resource remains.

Question 18

Other things equal, ethanol made from corn becomes economically viable (same or lower cost than using oil) when oil prices reach or more per barrel.

Accepted Answer

A)  $60 
B)  $80 
C)  $100 
D)  $120 
A)  $60 
B)  $80 
C)  $100 
D)  $120

Question 19

In the case of extraction of a nonrenewable resource, when user costs increase, it implies that expected future profits

Accepted Answer

A)  decrease, while the amount of current extraction increases. 
B)  decrease, and the amount of current extraction decreases. 
C)  increase, and the amount of current extraction increases. 
D)  increase, while the amount of current extraction decreases. 
A)  decrease, while the amount of current extraction increases. 
B)  decrease, and the amount of current extraction decreases. 
C)  increase, and the amount of current extraction increases. 
D)  increase, while the amount of current extraction decreases.

Question 20

(Consider This) Which of the following nations has implemented policies that pay women to have additional children?

Accepted Answer

A)  Russia 
B)  France 
C)  Italy 
D)  all of these nations 
A)  Russia 
B)  France 
C)  Italy 
D)  all of these nations

Exam 19: Natural Resource and Energy Economics

Which of the following is considered a renewable natural resource?

Negative externalities from energy production should be considered when comparing the cost of an energy source, because they

At any level of a mining firm's output, total cost will be equal to extraction costs

Over the past decade, U.S. per capita consumption of water

What is the relationship between living standards and birthrates?

Assuming that interest rates are positive, the present value of an $80 barrel of oil in two years is less than an $80 barrel today.

Which of the following is not one of the points made in "Tragedy of the Commons"?

If property rights are weak or uncertain, resource extraction will tend to

Modernizing economies that have declining birthrates may still experience population growth because of rapidly declining death rates.

If users can benefit from conservation, resources will be

ACME Corporation used to produce $50 worth of goods (in 2000 dollars) per million BTUs used. Now it produces $60 worth of goods (in 2000 dollars) per million BTUs. Based on this, we can conclude

Whose An Essay on the Principle of Population argued that human living standards could only temporarily rise above subsistence?

Encouraging conservation is especially difficult in the open ocean, where it is impossible to either define or enforce property rights over fish.

(Last Word) According to Yale University's Environmental Performance Index (EPI),

Other things equal, extracting oil from shale becomes economically viable (same or lower cost than using conventionally extracted oil) when oil prices reach or more per barrel.

The user cost of extracting a nonrenewable resource is

Other things equal, ethanol made from corn becomes economically viable (same or lower cost than using oil) when oil prices reach or more per barrel.

In the case of extraction of a nonrenewable resource, when user costs increase, it implies that expected future profits

(Consider This) Which of the following nations has implemented policies that pay women to have additional children?

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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