Question 1

If a nonrenewable resource is used more in the current period, the return on saving the resource for future falls.

Accepted Answer

A) True 
 B)False

Question 2

As extraction of a nonrenewable resource increases, the supply curve shifts up because:

Accepted Answer

A) more substitutes become available. 
B) competition among the existing suppliers intensifies. 
C) the marginal cost of extracting any given amount increases. 
D) the resource finds alternative usage. 
E) the resource becomes less productive. 
A) more substitutes become available. 
B) competition among the existing suppliers intensifies. 
C) the marginal cost of extracting any given amount increases. 
D) the resource finds alternative usage. 
E) the resource becomes less productive.

Question 3

Unlike nonrenewable resources, the timing of extraction of renewable resources are independent of the market rate of interest.

Accepted Answer

A) True 
 B)False

Question 4

The marginal cost of extraction of a nonrenewable resource increases with passage of time because:

Accepted Answer

A) the technology used in extraction depreciates in value. 
B) the price of the product that uses this resource increases. 
C) the exchange rate in the international market appreciates. 
D) the tragedy of commons problem is encountered. 
E) the resource gradually becomes scarce. 
A) the technology used in extraction depreciates in value. 
B) the price of the product that uses this resource increases. 
C) the exchange rate in the international market appreciates. 
D) the tragedy of commons problem is encountered. 
E) the resource gradually becomes scarce.

Question 5

Gold mining and the supply of gold not only depend on its price but also on the market rate of interest.

Accepted Answer

A) True 
 B)False

Question 6

The earnings of which of the following resources will comprise entirely of economic rent?

Accepted Answer

A) Unskilled labor 
B) Coal 
C) Timber 
D) Water 
E) Biomass 
A) Unskilled labor 
B) Coal 
C) Timber 
D) Water 
E) Biomass

Question 7

Extraction of petroleum in the current period will shift the supply curve of petroleum outward in the future resulting in a fall in price of petroleum.

Accepted Answer

A) True 
 B)False

Question 8

Common ownership of resources:

Accepted Answer

A) is a system by which the government allocates the rights to harvest renewable resources. 
B) may fail to ensure that harvesting of renewable resources does not exceed the maximum sustainable yield. 
C) is an environmentally effective method of correcting for an externality problem in renewable resource conservation. 
D) efficiently controls the harvesting of renewable resources. 
E) usually helps in preventing market failures. 
A) is a system by which the government allocates the rights to harvest renewable resources. 
B) may fail to ensure that harvesting of renewable resources does not exceed the maximum sustainable yield. 
C) is an environmentally effective method of correcting for an externality problem in renewable resource conservation. 
D) efficiently controls the harvesting of renewable resources. 
E) usually helps in preventing market failures.

Question 9

Lack of well-defined ____ may cause market failures.

Accepted Answer

A) fiscal policies 
B) public transportation systems 
C) private property rights 
D) interest rates 
E) monetary policies 
A) fiscal policies 
B) public transportation systems 
C) private property rights 
D) interest rates 
E) monetary policies

Question 10

Because there is a finite supply of a nonrenewable resource:

Accepted Answer

A) it has inadequate substitutes. 
B) any use of that resource today will leave less available for tomorrow. 
C) such resources are replenished faster than they are consumed. 
D) the government subsidizes the extraction of such resources. 
E) any use of that resource today means the value of the resource in the future will be less. 
A) it has inadequate substitutes. 
B) any use of that resource today will leave less available for tomorrow. 
C) such resources are replenished faster than they are consumed. 
D) the government subsidizes the extraction of such resources. 
E) any use of that resource today means the value of the resource in the future will be less.

Question 11

For any particular period of time, say a year, the supply of exhaustible resources:

Accepted Answer

A) decreases infinitely with increase in price. 
B) remains unaffected by any change in price. 
C) increases infinitely with increase in price. 
D) increases to a certain extent with increase in price. 
E) decreases to a certain extent with increase in price. 
A) decreases infinitely with increase in price. 
B) remains unaffected by any change in price. 
C) increases infinitely with increase in price. 
D) increases to a certain extent with increase in price. 
E) decreases to a certain extent with increase in price.

Question 12

Anything that affects the marginal revenue product of a nonrenewable resource will affect the demand for that resource.

Accepted Answer

A) True 
 B)False

Question 13

The supply of land being fixed, the earnings from land are called transfer earnings.

Accepted Answer

A) True 
 B)False

Question 14

The market's role is to ensure that nonrenewable resources are allocated across time to where they are most highly valued.This implies, if more is used today:

Accepted Answer

A) the future supply curve shifts downward. 
B) financial investments offer a lower rate of return. 
C) the return on saving the resource for future use rises. 
D) the expected demand for the resource in the future is low. 
E) technological advancement will guarantee a steady future supply. 
A) the future supply curve shifts downward. 
B) financial investments offer a lower rate of return. 
C) the return on saving the resource for future use rises. 
D) the expected demand for the resource in the future is low. 
E) technological advancement will guarantee a steady future supply.

Question 15

Which of the following is a nonrenewable source of energy?

Accepted Answer

A) Corn 
B) Ethanol 
C) Petroleum 
D) Bagasse 
E) Biomass 
A) Corn 
B) Ethanol 
C) Petroleum 
D) Bagasse 
E) Biomass

Exam 30: the Land Market and Natural Resources

If a nonrenewable resource is used more in the current period, the return on saving the resource for future falls.

As extraction of a nonrenewable resource increases, the supply curve shifts up because:

Unlike nonrenewable resources, the timing of extraction of renewable resources are independent of the market rate of interest.

The marginal cost of extraction of a nonrenewable resource increases with passage of time because:

Gold mining and the supply of gold not only depend on its price but also on the market rate of interest.

The earnings of which of the following resources will comprise entirely of economic rent?

Extraction of petroleum in the current period will shift the supply curve of petroleum outward in the future resulting in a fall in price of petroleum.

Common ownership of resources:

Lack of well-defined ____ may cause market failures.

Because there is a finite supply of a nonrenewable resource:

For any particular period of time, say a year, the supply of exhaustible resources:

Anything that affects the marginal revenue product of a nonrenewable resource will affect the demand for that resource.

The supply of land being fixed, the earnings from land are called transfer earnings.

The market's role is to ensure that nonrenewable resources are allocated across time to where they are most highly valued.This implies, if more is used today:

Which of the following is a nonrenewable source of energy?

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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