Question 1

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 ratesE) B) and D)
F) A) and B)

Question 2

Mining of "conflict diamonds" tends to

Accepted Answer

A)  be more profitable, as warring factions are willing to pay more for the diamonds.
B)  occur at a slower pace than would maximize the long-term stream of profits because war increases extraction costs.
C)  occur at a pace slower than would maximize the long-term stream of profits since the war disrupts production.
D)  occur at a pace faster than would maximize the long-term stream of profits since warring factions extract diamonds as quickly as possible due to fears that they may soon lose control of the diamond mines.E) A) and D)
F) B) and D)

Question 3

Alternative fuels become more economically viable as

Accepted Answer

A)  the demand for oil decreases.
B)  subsidies for alternative fuels are removed.
C)  oil exploration and drilling technology improve.
D)  the price of oil rises.E) C) and D)
F) A) and B)

Question 4

Kara and Kyle are competing sockeye salmon fishers.Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each.Kara's cost per ton is $8; Kyle's cost per ton is $12.Assume that the market price of sockeye salmon is $15 per ton.If Kara pays Kyle $5 per ton for his ITQs, and if she then catches her new limit of 4,000 tons, her profit would be

Accepted Answer

A)  $18,000.
B)  $22,000.
C)  $20,000.
D)  $4,000.E) All of the above
F) B) and C)

Question 5

The total allowable catch (TAC)  system differs from the individual transferable quota (ITQ)  system in that

Accepted Answer

A)  TAC limits the total harvest of fish, while ITQ does not.
B)  ITQ limits an individual fishery's harvest, but TAC does not.
C)  TAC prevents an "individual arms race" among fisheries, whereas ITQ does not.
D)  ITQ does not offer significant cost-saving benefits, but TAC does.E) None of the above
F) B) and D)

Question 6

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.E) A) and C)
F) None of the above

Question 7

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.E) B) and C)
F) A) and D)

Question 8

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.E) C) and D)
F) A) and C)

Question 9

Energy demand is relatively stable over the course of a day.

Accepted Answer

A) True 
 B)False

Question 10

(Consider This)  Governments' main economic concern about low birthrates is that

Accepted Answer

A)  in a few decades, there will not be enough working-age adults to support pension responsibilities to retirees.
B)  the smaller population makes the economy more vulnerable to foreign takeover.
C)  a declining population will reduce worker productivity.
D)  smaller populations are more susceptible to epidemics.E) A) and B)
F) A) and C)

Question 11

A farmer discovers a natural gas reserve on his property.He can extract the natural gas for a profit of $40 per unit now, $55 per unit in one year, $57 per unit in two years, and $60 in three years.The current market rate of interest is 6 percent.When should the farmer extract the natural gas to obtain the most profit per unit in present value terms?

Accepted Answer

A)  today
B)  one year
C)  two years
D)  three yearsE) A) and B)
F) A) and C)

Question 12

ITQs generate the most efficient use of resources when everyone keeps and fills their own quotas.

Accepted Answer

A) True 
 B)False

Question 13

Kara and Kyle are competing sockeye salmon fishers.Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each.Kara's cost per ton is $8; Kyle's cost per ton is $12.If the market price of sockeye salmon is $15 per ton, and Kara and Kyle both catch their quota, their combined profit will be

Accepted Answer

A)  $6,000.
B)  $14,000.
C)  $20,000.
D)  $30,000.E) A) and C)
F) B) and C)

Question 14

Relative to 1800, the living standard of the average person today in the United States is about times higher.

Accepted Answer

A)  5
B)  12
C)  20
D)  42E) C) and D)
F) B) and D)

Question 15

With modernization, the world's population will continue to decline even as many countries experience declining death rates.

Accepted Answer

A) True 
 B)False

Question 16

The table shows the quantity of gold bars (Qb)  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.If the current price of a bar of gold is $25,000, how many bars (in thousands)  should OZ extract and sell this year in order to maximize profits?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) A) and C)
F) A) and D)

Question 17

The United States produces more than twice as much output per million BTUs of energy consumed as it did in 1950.Topic: Energy Economics
Topic: Resource Supplies: Doom or Boom?

Accepted Answer

A) True 
 B)False

Question 18

The use of present value calculations in valuing natural resources is important because it

Accepted Answer

A)  ensures that net benefits are minimized over time.
B)  permits greater extraction of resources in the future.
C)  permits greater extraction of resources in the present.
D)  ensures resources are allocated to their best use over time.E) B) and C)
F) None of the above

Question 19

Which of the following is not considered by demographers to be part of the three-step demographic transition?

Accepted Answer

A)  simultaneous low birthrates and death rates
B)  simultaneous high birthrates and death rates
C)  low birthrates and high death rates
D)  high birthrates and low death ratesE) None of the above
F) All of the above

Question 20

Demographers predict that the worldwide total fertility rate will decline to one birth per woman per lifetime.If this happens, then

Accepted Answer

A)  each generation will be one-fourth as large as the previous one.
B)  each generation will be half as large as the previous one.
C)  each generation will be as large as the previous one.
D)  each generation will be one-half larger than the previous.E) A) and B)
F) B) and D)

Exam 19: Natural Resource and Energy Economics

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

Correct Answer
verified

Correct Answer
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Energy demand is relatively stable over the course of a day.

Correct Answer
verified

Relative to 1800, today in the world there are

Correct Answer
verified

Relative to 1800, the living standard of the average person today in the United States is about times higher.

Correct Answer
verified

The total allowable catch (TAC) system differs from the individual transferable quota (ITQ) system in that

Correct Answer
verified

With modernization, the world's population will continue to decline even as many countries experience declining death rates.

Correct Answer
verified

The United States produces more than twice as much output per million BTUs of energy consumed as it did in 1950.Topic: Energy Economics Topic: Resource Supplies: Doom or Boom?

Correct Answer
verified

The use of present value calculations in valuing natural resources is important because it

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

ITQs generate the most efficient use of resources when everyone keeps and fills their own quotas.

Correct Answer
verified

Correct Answer
verified

Demographers predict that the worldwide total fertility rate will decline to one birth per woman per lifetime.If this happens, then

Correct Answer
verified

Alternative fuels become more economically viable as

Correct Answer
verified

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

Correct Answer
verified

Mining of "conflict diamonds" tends to

Correct Answer
verified

Which of the following is not considered by demographers to be part of the three-step demographic transition?

Correct Answer
verified

Correct Answer
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(Consider This) Governments' main economic concern about low birthrates is that

Correct Answer
verified

Exam 19: Natural Resource and Energy Economics

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Energy demand is relatively stable over the course of a day.

Correct AnswerverifiedShow Answer

Relative to 1800, today in the world there are

Correct AnswerverifiedShow Answer

Relative to 1800, the living standard of the average person today in the United States is about times higher.

Correct AnswerverifiedShow Answer

The total allowable catch (TAC) system differs from the individual transferable quota (ITQ) system in that

Correct AnswerverifiedShow Answer

With modernization, the world's population will continue to decline even as many countries experience declining death rates.

Correct AnswerverifiedShow Answer

The United States produces more than twice as much output per million BTUs of energy consumed as it did in 1950.Topic: Energy Economics Topic: Resource Supplies: Doom or Boom?

Correct AnswerverifiedShow Answer

The use of present value calculations in valuing natural resources is important because it

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

ITQs generate the most efficient use of resources when everyone keeps and fills their own quotas.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Demographers predict that the worldwide total fertility rate will decline to one birth per woman per lifetime.If this happens, then

Correct AnswerverifiedShow Answer

Alternative fuels become more economically viable as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Mining of "conflict diamonds" tends to

Correct AnswerverifiedShow Answer

Which of the following is not considered by demographers to be part of the three-step demographic transition?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

(Consider This) Governments' main economic concern about low birthrates is that

Correct AnswerverifiedShow Answer

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