Question 1

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.

Question 2

The graph shows the extraction costs for TX Oil Company in the first year in a situation where it will extract oil from a reserve over two years. If the current market price is $60 and user costs are not considered, the extraction quantity is

Accepted Answer

A) 10 units. 
B) 20 units. 
C) 30 units. 
D) 40 units.

Question 3

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.

Question 4

Malthus's theory states that living standards could only temporarily rise above subsistence levels.

Accepted Answer

A) True 
 B)False

Question 5

Discuss the evidence on whether economic growth is bad for the environment.

Accepted Answer

The answer of Discuss the evidence on whether economic growth...

Question 6

Extraction costs of a nonrenewable resource include the

Accepted Answer

A) cost of removal from the ground only. 
B) cost of removal from the ground plus the cost of preparation for sale. 
C) cost of removal from the ground, the cost of preparation for sale, and the cost of not being able to extract and sell the resource in the future. 
D) cost of removal from the ground plus replanting costs.

Question 7

ITQs both limit catches and encourage fishing in the least costly way.

Accepted Answer

A) True 
 B)False

Question 8

Over the past decade, total and per capita water use in the United States have

Accepted Answer

A) leveled off and fallen, respectively. 
B) both decreased. 
C) fallen and leveled off, respectively. 
D) both increased.

Question 9

When diamonds are mined in conflict or war-torn areas, there is

Accepted Answer

A) more loss from auctioning off the resource. 
B) minimal waste of this resource. 
C) strong incentive for conservation. 
D) strong incentive for overmining.

Question 10

Suppose that a city's energy demand is 30 megawatts during off-peak times and 40 megawatts at its peak. The city has been purchasing electricity from an outside company but has decided to build its own power plants to satisfy all of its energy demand. The city can choose to build one or more plants to generate the needed electricity. There are three types of plant: coal, natural gas, and hydroelectric. The three types of plants face the costs appearing in the table. Assuming the city's power needs will not change in the foreseeable future, to achieve the lowest cost of power generation, the city should build

Accepted Answer

A) two coal-fired plants. 
B) two natural gas plants. 
C) one coal-fired and one hydroelectric plant. 
D) four hydroelectric plants.

Question 11

The graph shows the extraction costs for TX Oil Company in the first year in a situation where it will extract oil from a reserve over two years. What will be the quantity extracted if user costs are considered, compared to the case where they are not considered?

Accepted Answer

A) 10 units versus 20 units 
B) 20 units versus 10 units 
C) 10 units versus 30 units 
D) 20 units versus 40 units

Question 12

Which of the following is considered a renewable natural resource?

Accepted Answer

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

Question 13

The table shows the quantity of gold bars in thousands, the extraction cost for each thousand bars (in millions of dollars), and the user cost of each thousand bars (in millions of dollars)facing the OZ Mining Company this year (all costs are marginal). 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 $20,000, how many bars (in thousands)should OZ extract and sell this year?

Accepted Answer

A) remain unchanged. 
B) decrease by 500. 
C) increase by 500. 
D) decrease by 250.

Question 14

Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $28. Assume that the market price of Pacific halibut is $40 per ton. If Melanie pays Oli $10 per ton for his ITQs and then catches her new limit of 2,000 tons, her profit would be

Accepted Answer

A) $20,000. 
B) $32,000. 
C) $30,000. 
D) $40,000.

Question 15

Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $28. If the market price of Pacific halibut is $40 per ton, and Melanie and Oli both catch their quota, their combined profit will be

Accepted Answer

A) $12,000. 
B) $22,000. 
C) $32,000. 
D) $25,000.

Question 16

Other things equal, in the absence of Environmental Protection Agency pollution credits, biodiesel becomes economically viable (as or less costly than using oil)when oil prices reach _____ or more per barrel.

Accepted Answer

A) $50 
B) $110 
C) $80 
D) $127

Question 17

Linda fishes for mahi-mahi at a cost of $10 per ton, while Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ, and the current market price is $13 per ton. If Linda offered to sell her ITQ to Tessa for $3,000, she and Tessa would

Accepted Answer

A) make the sale because they're both better off. 
B) not make the sale, because Linda is better off and Tessa is not. 
C) not make the sale, because Tessa is better of and Linda is not. 
D) not make the sale, because neither is better off.

Question 18

Which of the following countries had the highest fertility rate in 2018, according to CIA data?

Accepted Answer

A) Japan 
B) China 
C) Russia 
D) the United States

Question 19

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.

Question 20

In 2017, the primary sources of U.S. electricity generation, in order from largest to smallest, were

Accepted Answer

A) natural gas, coal, nuclear, and hydropower. 
B) natural gas, hydropower, nuclear, and renewables (wind and solar). 
C) coal, natural gas, nuclear, and hydropower. 
D) hydropower, nuclear, coal, and petroleum.

Exam 19: Natural Resource and Energy Economics

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