Question 1

Property rights over fish in the open ocean exist once the fish are caught.

Accepted Answer

A) True 
 B)False

Question 2

Productive inputs that are actually or virtually fixed in supply are known as

Accepted Answer

A)   renewable natural resources.
B)   natural capital.
C)   nonrenewable natural resources.
D)   alternative fuels.

Question 3

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. The forest is more likely to be harvested and replanted at a sustainable rate if

Accepted Answer

A)   property rights are well defined and enforced.
B)   property rights are weak or nonexistent.
C)   there is no government protection of property rights and the parties can negotiate a settlement.
D)   Ben is given sole ownership of the property.

Question 4

A total fertility rate of 1.0 will cause the

Accepted Answer

A)   population to remain stable.
B)   population to double in one generation.
C)   population to collapse in one generation.
D)   next generation to be half the size of the current generation.

Question 5

About what minimum price per barrel of oil is necessary for biodiesel to become economically viable as an alternative energy source?

Accepted Answer

A)   $30 per barrel
B)   $50 per barrel
C)   $100 per barrel
D)   $80 per barrel

Question 6

Future shortages in natural resource markets are not expected to occur widely due to

Accepted Answer

A)   reduced hours at work.
B)   reduced population growth.
C)   higher standards of living.
D)   higher per capita consumption.

Question 7

Power plants with the lowest operating costs tend to

Accepted Answer

A)   have the lowest fixed costs in terms of construction.
B)   have the highest fixed costs in terms of construction.
C)   operate on the smallest scale of energy production.
D)   generate the cleanest energy.

Question 8

Resource demand has grown over time

Accepted Answer

A)   because of population growth only.
B)   because of increased consumption per person only.
C)   because of both increased population and greater consumption per person.
D)   despite decreases in population and consumption per person.

Question 9

Which one of the following is a correct description of the relationship between the price of oil and the production of alternative energy sources?

Accepted Answer

A)   As the price of oil falls, the production of alternative energy sources rises.
B)   As the price of oil rises, the production of alternative energy sources falls.
C)   As the price of oil rises, the production of alternative energy sources rises.
D)   As the price of oil falls, the production of alternative energy sources stays the same.

Question 10

(Consider This)  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 11

Higher user costs imply that a resource should be extracted more quickly.

Accepted Answer

A) True 
 B)False

Question 12

Data from the U.S. Energy Information Administration on per capita energy consumption in the United States for the 65-year period 1945-2014 show that it has

Accepted Answer

A)   continually increased.
B)   continually decreased.
C)   increased, leveled off, and started declining.
D)   decreased, leveled off, and started rising.

Question 13

Donald fishes for swordfish at a cost of $6 per ton. Ronny fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ, and the current market price is $10 per ton. If Donald sold his ITQ to Ronny for $5,000, society would benefit from

Accepted Answer

A)   more fish being caught.
B)   less fish being caught.
C)   an efficiency savings in fishing costs of $2,000.
D)   an efficiency savings in fishing costs of $5,000.

Question 14

Linda fishes for mahi mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ and the current market price is $13. If Linda sold her ITQ to Tessa for $4,000, society would benefit from

Accepted Answer

A)   more fish being caught.
B)   less fish being caught.
C)   an efficiency savings in fishing costs of $2,000.
D)   an efficiency savings in fishing costs of $5,000.

Question 15

Consider a coal mining company that can mine coal this year or next year. As expected future profits increase, the extraction quantity this year

Accepted Answer

A)   increases due to a higher user cost.
B)   increases due to a lower user cost.
C)   decreases due to a higher user cost.
D)   decreases due to a lower user cost.

Question 16

A logging company is considering logging an area for a current cost of $500 per acre to obtain a profit the next year of $600 per acre. The market rate of interest is 10 percent. Should the company make the investment?

Accepted Answer

A)   Yes, the future value of the profit is greater than the present value of the cost.
B)   No, the future value of the profit is less than the present value of the cost.
C)   Yes, the present value of the profit is greater than the present value of the cost.
D)   No, the present value of the profit is less than the present value of the cost.

Question 17

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.

Question 18

According to data from the UN Food and Agriculture Organization, from 2010 to 2015 the amount of land worldwide that's covered by forests

Accepted Answer

A)   expanded by about 5 percent.
B)   stayed roughly constant.
C)   shrank by about 3 percent.
D)   shrank by about 12 percent.

Question 19

Studies by economists indicate that economic growth and rising living standards are good for the environment because, as societies get richer, they tend to spend more on things that improve environmental quality.

Accepted Answer

A) True 
 B)False

Question 20

An oil producer discovers an oil supply in Texas that can be pumped for a profit of $50 per barrel now, $60 per barrel in three years, $80 per barrel in five years, or $90 a barrel in seven years. The current market rate of interest is 3 percent. When should the oil producer extract the oil to obtain the most profit per barrel in present value terms?

Accepted Answer

A)   today
B)   three years
C)   five years
D)   seven years

Exam 19: Natural Resource and Energy Economics

Property rights over fish in the open ocean exist once the fish are caught.

Correct Answer
verified

Resource demand has grown over time

Correct Answer
verified

A logging company is considering logging an area for a current cost of $500 per acre to obtain a profit the next year of $600 per acre. The market rate of interest is 10 percent. Should the company make the investment?

Correct Answer
verified

Linda fishes for mahi mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ and the current market price is $13. If Linda sold her ITQ to Tessa for $4,000, society would benefit from

Correct Answer
verified

Data from the U.S. Energy Information Administration on per capita energy consumption in the United States for the 65-year period 1945-2014 show that it has

Correct Answer
verified

Consider a coal mining company that can mine coal this year or next year. As expected future profits increase, the extraction quantity this year

Correct Answer
verified

Power plants with the lowest operating costs tend to

Correct Answer
verified

Studies by economists indicate that economic growth and rising living standards are good for the environment because, as societies get richer, they tend to spend more on things that improve environmental quality.

Correct Answer
verified

(Consider This) Which of the following must occur for wind and solar power to displace coal and gas?

Correct Answer
verified

According to data from the UN Food and Agriculture Organization, from 2010 to 2015 the amount of land worldwide that's covered by forests

Correct Answer
verified

About what minimum price per barrel of oil is necessary for biodiesel to become economically viable as an alternative energy source?

Correct Answer
verified

Productive inputs that are actually or virtually fixed in supply are known as

Correct Answer
verified

Donald fishes for swordfish at a cost of $6 per ton. Ronny fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ, and the current market price is $10 per ton. If Donald sold his ITQ to Ronny for $5,000, society would benefit from

Correct Answer
verified

Higher user costs imply that a resource should be extracted more quickly.

Correct Answer
verified

A total fertility rate of 1.0 will cause the

Correct Answer
verified

Which one of the following is a correct description of the relationship between the price of oil and the production of alternative energy sources?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Future shortages in natural resource markets are not expected to occur widely due to

Correct Answer
verified

Exam 19: Natural Resource and Energy Economics

Property rights over fish in the open ocean exist once the fish are caught.

Correct AnswerverifiedShow Answer

Resource demand has grown over time

Correct AnswerverifiedShow Answer

A logging company is considering logging an area for a current cost of $500 per acre to obtain a profit the next year of $600 per acre. The market rate of interest is 10 percent. Should the company make the investment?

Correct AnswerverifiedShow Answer

Linda fishes for mahi mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton. Both have one 1,000-ton ITQ and the current market price is $13. If Linda sold her ITQ to Tessa for $4,000, society would benefit from

Correct AnswerverifiedShow Answer

Data from the U.S. Energy Information Administration on per capita energy consumption in the United States for the 65-year period 1945-2014 show that it has

Correct AnswerverifiedShow Answer

Consider a coal mining company that can mine coal this year or next year. As expected future profits increase, the extraction quantity this year

Correct AnswerverifiedShow Answer

Power plants with the lowest operating costs tend to

Correct AnswerverifiedShow Answer

Studies by economists indicate that economic growth and rising living standards are good for the environment because, as societies get richer, they tend to spend more on things that improve environmental quality.

Correct AnswerverifiedShow Answer

(Consider This) Which of the following must occur for wind and solar power to displace coal and gas?

Correct AnswerverifiedShow Answer

According to data from the UN Food and Agriculture Organization, from 2010 to 2015 the amount of land worldwide that's covered by forests

Correct AnswerverifiedShow Answer

About what minimum price per barrel of oil is necessary for biodiesel to become economically viable as an alternative energy source?

Correct AnswerverifiedShow Answer

Productive inputs that are actually or virtually fixed in supply are known as

Correct AnswerverifiedShow Answer

Donald fishes for swordfish at a cost of $6 per ton. Ronny fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ, and the current market price is $10 per ton. If Donald sold his ITQ to Ronny for $5,000, society would benefit from

Correct AnswerverifiedShow Answer

Higher user costs imply that a resource should be extracted more quickly.

Correct AnswerverifiedShow Answer

A total fertility rate of 1.0 will cause the

Correct AnswerverifiedShow Answer

Which one of the following is a correct description of the relationship between the price of oil and the production of alternative energy sources?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Future shortages in natural resource markets are not expected to occur widely due to

Correct AnswerverifiedShow Answer

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