Question 1

Which of the following policies has succeeded in reducing fishery catch sizes without creating an "arms race" among fishers?

Accepted Answer

A)  Limiting the length of the catch season. 
B)  Limiting the number of boats allowed in a given area. 
C)  Limiting catch size (TA
C) . 
D)  Issuing individual transferable quotas (ITQs). 
A)  Limiting the length of the catch season. 
B)  Limiting the number of boats allowed in a given area. 
C)  Limiting catch size (TA
C) . 
D)  Issuing individual transferable quotas (ITQs).

Question 2

Which of the following is the best example of a market failure that would lead a firm to extract resources at a rate that is faster than the rate that would maximize its long-term stream of profits?

Accepted Answer

A)  The market price of the resource rises. 
B)  Weak property rights create fears that firms will not be allowed to extract in the future. 
C)  An increase in market interest rates. 
D)  New information suggests that the demand for the resource will be greater in the future. 
A)  The market price of the resource rises. 
B)  Weak property rights create fears that firms will not be allowed to extract in the future. 
C)  An increase in market interest rates. 
D)  New information suggests that the demand for the resource will be greater in the future.

Question 3

The Economist magazine's Commodities Price Index tracks the prices of the most:

Accepted Answer

A)  important finished goods that are traded internationally. 
B)  important minerals that are traded internationally. 
C)  important productive resources that are traded internationally. 
D)  heavily traded agricultural-based products. 
A)  important finished goods that are traded internationally. 
B)  important minerals that are traded internationally. 
C)  important productive resources that are traded internationally. 
D)  heavily traded agricultural-based products.

Question 4

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 5

Relative to 1800,today in the world there are:

Accepted Answer

A)  more people but lower per-capita consumption. 
B)  more people but the same per-capita consumption. 
C)  more people and higher per-capita consumption. 
D)  the same number of people but higher per-capita consumption. 
A)  more people but lower per-capita consumption. 
B)  more people but the same per-capita consumption. 
C)  more people and higher per-capita consumption. 
D)  the same number of people but higher per-capita consumption.

Question 6

Population will necessarily fall if the:

Accepted Answer

A)  birthrate exceeds the replacement rate. 
B)  replacement rate exceeds the birthrate. 
C)  birthrate exceeds the total fertility rate. 
D)  total fertility rate exceeds the birthrate. 
A)  birthrate exceeds the replacement rate. 
B)  replacement rate exceeds the birthrate. 
C)  birthrate exceeds the total fertility rate. 
D)  total fertility rate exceeds the birthrate.

Question 7

Which of the following is the best example of a fishery?

Accepted Answer

A)  All marine life along the Great Barrier Reef. 
B)  Pacific halibut. 
C)  U.S.Department of Fish and Game. 
D)  Crab. 
A)  All marine life along the Great Barrier Reef. 
B)  Pacific halibut. 
C)  U.S.Department of Fish and Game. 
D)  Crab.

Question 8

Total allowable catch policies promote economic efficiency better than individual transferable quotas.

Accepted Answer

A) True 
 B)False

Question 9

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. Refer to the information given.If property rights are well-defined and enforced:

Accepted Answer

A)  Alex could buy Ben's part of the land and harvest and replant in a sustainable manner. 
B)  Ben could buy Alex's part of the land and harvest all the timber as quickly as possible. 
C)  incentives to harvest and replant in a sustainable manner are greater than with no property rights. 
D)  all of these could occur. 
A)  Alex could buy Ben's part of the land and harvest and replant in a sustainable manner. 
B)  Ben could buy Alex's part of the land and harvest all the timber as quickly as possible. 
C)  incentives to harvest and replant in a sustainable manner are greater than with no property rights. 
D)  all of these could occur.

Question 10

In electricity generation,it is most economically efficient to use a single energy source.

Accepted Answer

A) True 
 B)False

Question 11

The table below shows the quantity of gold bars (Qb)in thousands,the extraction cost for each thousand bars (in millions of dollars),and user cost of each thousand bars (in millions of dollars)facing the OZ Mining Company this year. $$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity of Gold Bars } \
\text { (in thousands) }\
\hline
\end{array} & \begin{array} { c } 
\text { Extraction Cost } \
\text { (in millions of dollars) }\
\hline
\end{array} & \begin{array} { c } 
\text { User Cost } \
\text { (in millions of dollars) }\
\hline
\end{array} \
0 & \$ 10 & \$ 5 \
1 & 15 & 5 \
2 & 20 & 5 \
3 & 25 & 5 \
4 & 30 & 5 \
5 & 35 & 5
\end{array}$$ Refer to the data.Suppose that a new government regulation is going to shut down OZ's mining operation one year from now.If the current price per bar of gold is $25,000,how many bars (in thousands)should OZ extract and sell this year?

Accepted Answer

A)  3. 
B)  4. 
C)  5. 
D)  As many as possible. 
A)  3. 
B)  4. 
C)  5. 
D)  As many as possible.

Question 12

Most developed countries have fertility rates less than 2.1.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  An increase in the present value of expected future profits. 
B)  A decrease in extraction costs. 
C)  A decrease in user costs. 
D)  An increase in the current price of the resource. 
A)  An increase in the present value of expected future profits. 
B)  A decrease in extraction costs. 
C)  A decrease in user costs. 
D)  An increase in the current price of the resource.

Question 16

Which of the following is considered a renewable natural resource?

Accepted Answer

A)  Aquifers. 
B)  Coal. 
C)  Petroleum. 
D)  Iron. 
A)  Aquifers. 
B)  Coal. 
C)  Petroleum. 
D)  Iron.

Question 17

According to the concept of present value,a $50 barrel of oil today is worth:

Accepted Answer

A)  less than a $50 barrel in 2 years. 
B)  more than a $50 barrel in 2 years. 
C)  the same as a $50 barrel in 2 years. 
D)  the same as a $50 barrel in 2 years,but only if there is no inflation during those 2 years. 
A)  less than a $50 barrel in 2 years. 
B)  more than a $50 barrel in 2 years. 
C)  the same as a $50 barrel in 2 years. 
D)  the same as a $50 barrel in 2 years,but only if there is no inflation during those 2 years.

Question 18

The demand for productive resources has grown faster than the supply of productive resources for the past 150 years.

Accepted Answer

A) True 
 B)False

Question 19

(Consider This)Which of the following best explains why the solar panel companies Solyndra and Abound went bankrupt in 2011 and 2012,respectively?

Accepted Answer

A)  Overreliance on government subsidies that made them inefficient. 
B)  Oversupply of solar panels on the world market that drove down prices and made these firms uncompetitive in the market. 
C)  Expansion of other alternative energy sources made solar power unprofitable. 
D)  Dramatic and unexpected increases in input costs caused huge economic losses. 
A)  Overreliance on government subsidies that made them inefficient. 
B)  Oversupply of solar panels on the world market that drove down prices and made these firms uncompetitive in the market. 
C)  Expansion of other alternative energy sources made solar power unprofitable. 
D)  Dramatic and unexpected increases in input costs caused huge economic losses.

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. Refer to the information given.If no explicit property right is given over the forest land,then:

Accepted Answer

A)  a property right will be established when trees are cut down and brought to market. 
B)  there is no property right over the harvested timber. 
C)  Alex and Ben will likely work out an agreement on harvesting and replanting the land. 
D)  that implies that government owns and regulates its use. 
A)  a property right will be established when trees are cut down and brought to market. 
B)  there is no property right over the harvested timber. 
C)  Alex and Ben will likely work out an agreement on harvesting and replanting the land. 
D)  that implies that government owns and regulates its use.

Which of the following policies has succeeded in reducing fishery catch sizes without creating an "arms race" among fishers?

Which of the following is the best example of a market failure that would lead a firm to extract resources at a rate that is faster than the rate that would maximize its long-term stream of profits?

The Economist magazine's Commodities Price Index tracks the prices of the most:

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

Relative to 1800,today in the world there are:

Population will necessarily fall if the:

Which of the following is the best example of a fishery?

Total allowable catch policies promote economic efficiency better than individual transferable quotas.

In electricity generation,it is most economically efficient to use a single energy source.

Most developed countries have fertility rates less than 2.1.

Total allowable catch (TAC):

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

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

Which of the following is considered a renewable natural resource?

According to the concept of present value,a $50 barrel of oil today is worth:

The demand for productive resources has grown faster than the supply of productive resources for the past 150 years.

(Consider This)Which of the following best explains why the solar panel companies Solyndra and Abound went bankrupt in 2011 and 2012,respectively?

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters

Exam 18: Natural Resource and Energy Economics

Which of the following policies has succeeded in reducing fishery catch sizes without creating an "arms race" among fishers?

Which of the following is the best example of a market failure that would lead a firm to extract resources at a rate that is faster than the rate that would maximize its long-term stream of profits?

The Economist magazine's Commodities Price Index tracks the prices of the most:

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

Relative to 1800,today in the world there are:

Population will necessarily fall if the:

Which of the following is the best example of a fishery?

Total allowable catch policies promote economic efficiency better than individual transferable quotas.

In electricity generation,it is most economically efficient to use a single energy source.

Most developed countries have fertility rates less than 2.1.

Total allowable catch (TAC):

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

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

Which of the following is considered a renewable natural resource?

According to the concept of present value,a $50 barrel of oil today is worth:

The demand for productive resources has grown faster than the supply of productive resources for the past 150 years.

(Consider This)Which of the following best explains why the solar panel companies Solyndra and Abound went bankrupt in 2011 and 2012,respectively?

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters