Question 1

Explain how fracking has boosted the U.S. oil supply.

Accepted Answer

New drilling technologies like hydraulic...

Question 2

Assuming that interest rates are positive, the present value of an $80 barrel of oil in two years is less than an $80 barrel today.

Accepted Answer

A) True 
 B)False

Question 3

According to Paul Ehrlich's 1968 prediction in The Population Bomb, population growth would result in

Accepted Answer

A)  overuse of natural resources, leading to famines.
B)  stable uses of natural resources, creating long-term stability.
C)  efficient use of natural resources, fostering prosperity.
D)  reduced dependence on natural resources, leading to growth.E) A) and B)
F) A) and D)

Question 4

In modern economies, the cost of raising children has

Accepted Answer

A)  decreased because of laxer enforcement of laws that make child labor illegal.
B)  increased because of stronger enforcement of laws that make child labor illegal.
C)  increased because of fewer requirements for schooling until adulthood.
D)  decreased because of more requirements for schooling until adulthood.E) A) and D)
F) A) and C)

Question 5

In 2017, according to U.S. Energy Information Administration data, which of the following sources of energy contributed the smallest share to U.S. electricity generation?

Accepted Answer

A)  petroleum
B)  nuclear
C)  solar power
D)  natural gasE) None of the above
F) B) and C)

Question 6

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) A) and C)
F) A) and B)

Question 7

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 rises from $60 to $70 and user costs are not considered, the extraction quantity

Accepted Answer

A)  rises by 10 units to 20 units.
B)  falls by 10 units to 20 units.
C)  rises by 10 units to 40 units.
D)  falls by 20 units to 10 units.E) None of the above
F) B) and C)

Question 8

Profit-maximizing extraction companies will attempt to

Accepted Answer

A)  extract resources as quickly as possible.
B)  delay extraction as long as possible.
C)  find rates of extraction that maximize the flow of profits over time.
D)  extract resources at a constant rate every year to minimize price fluctuations.E) A) and D)
F) All of the above

Question 9

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

Question 10

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) C) and D)
F) A) and B)

Question 11

What is a tradable fishing limit that gives the holder the right to harvest a given quantity of fish during a given time period?

Accepted Answer

A)  replacement rate
B)  total allowable catch
C)  individual transferable quota
D)  government-approved fishing licenseE) B) and D)
F) All of the above

Question 12

An oil company is considering drilling in the Gulf at a current cost of $350,000 with an expected profit of $400,000 in three years. The current market rateof interest is 5 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)  No, the present value of the profit is less than the present value of the cost..
D)  Yes, the present value of the profit is greater than the present value of the cost..E) All of the above
F) None of the above

Question 13

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

Accepted Answer

A)  a reduction in extraction costs
B)  a reduction in user costs
C)  a reduction in total costs
D)  a reduction in the price of the resourceE) B) and C)
F) A) and B)

Question 14

Demographers refer to this as the "demographic transition": The reduction in death rates brought about by rising standards of living "causes a temporary population explosion because parents-initially unaware that such a revolutionary change in death rates has taken place-for a while keep having six or more children-to ensure that at least two will survive to adulthood." For which of the following countries could this statement be used to explain its current population trend?

Accepted Answer

A)  United States
B)  Japan
C)  Egypt
D)  ChinaE) A) and B)
F) A) and C)

Question 15

Which of the following is the best example of a market failure to conserve a resource resulting from poorly defined property rights?

Accepted Answer

A)  preserving elephants in Africa
B)  drilling for oil in Saudi Arabia
C)  mining of oil shale in Canada
D)  hunting of deer in the United StatesE) A) and B)
F) B) and D)

Question 16

What is energy economics, and what does it have to say about energy demand and efficiency?

Accepted Answer

Energy economics studies how people deal...

Question 17

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 $26; Oli's cost per ton is $31. If the market price of Pacific halibut is $37 per ton, what is the maximum amount Melanie would be willing to pay per ton for Oli's ITQs?

Accepted Answer

A)  $6.
B)  $31.
C)  $11.
D)  $37.E) B) and C)
F) None of the above

Question 18

If a country has a total fertility rate of 1.80, then, all else equal, we would expect

Accepted Answer

A)  population in that country to rise over time.
B)  population in that country to fall over time.
C)  the replacement rate to also equal 1.8.
D)  population in that country to remain stable over time.E) A) and C)
F) B) and C)

Question 19

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 B)
F) All of the above

Question 20

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

Exam 19: Natural Resource and Energy Economics

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

Correct Answer
verified

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 rises from $60 to $70 and user costs are not considered, the extraction quantity

Correct Answer
verified

What is a tradable fishing limit that gives the holder the right to harvest a given quantity of fish during a given time period?

Correct Answer
verified

An oil company is considering drilling in the Gulf at a current cost of $350,000 with an expected profit of $400,000 in three years. The current market rateof interest is 5 percent. Should the company make the investment?

Correct Answer
verified

Assuming that interest rates are positive, the present value of an $80 barrel of oil in two years is less than an $80 barrel today.

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

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

Correct Answer
verified

Correct Answer
verified

In 2017, according to U.S. Energy Information Administration data, which of the following sources of energy contributed the smallest share to U.S. electricity generation?

Correct Answer
verified

According to Paul Ehrlich's 1968 prediction in The Population Bomb, population growth would result in

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Explain how fracking has boosted the U.S. oil supply.

Correct Answer
verified
New drilling technologies like hydraulic...
View Answer

Mining of "conflict diamonds" tends to

Correct Answer
verified

Profit-maximizing extraction companies will attempt to

Correct Answer
verified

If a country has a total fertility rate of 1.80, then, all else equal, we would expect

Correct Answer
verified

What is energy economics, and what does it have to say about energy demand and efficiency?

Correct Answer
verified
Energy economics studies how people deal...
View Answer

Which of the following is the best example of a market failure to conserve a resource resulting from poorly defined property rights?

Correct Answer
verified

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

Correct Answer
verified

In modern economies, the cost of raising children has

Correct Answer
verified

Exam 19: Natural Resource and Energy Economics

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

Correct AnswerverifiedShow Answer

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 rises from $60 to $70 and user costs are not considered, the extraction quantity

Correct AnswerverifiedShow Answer

What is a tradable fishing limit that gives the holder the right to harvest a given quantity of fish during a given time period?

Correct AnswerverifiedShow Answer

An oil company is considering drilling in the Gulf at a current cost of $350,000 with an expected profit of $400,000 in three years. The current market rateof interest is 5 percent. Should the company make the investment?

Correct AnswerverifiedShow Answer

Assuming that interest rates are positive, the present value of an $80 barrel of oil in two years is less than an $80 barrel today.

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

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 2017, according to U.S. Energy Information Administration data, which of the following sources of energy contributed the smallest share to U.S. electricity generation?

Correct AnswerverifiedShow Answer

According to Paul Ehrlich's 1968 prediction in The Population Bomb, population growth would result in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain how fracking has boosted the U.S. oil supply.

Correct AnswerverifiedNew drilling technologies like hydraulic...View AnswerShow Answer

Mining of "conflict diamonds" tends to

Correct AnswerverifiedShow Answer

Profit-maximizing extraction companies will attempt to

Correct AnswerverifiedShow Answer

If a country has a total fertility rate of 1.80, then, all else equal, we would expect

Correct AnswerverifiedShow Answer

What is energy economics, and what does it have to say about energy demand and efficiency?

Correct AnswerverifiedEnergy economics studies how people deal...View AnswerShow Answer

Which of the following is the best example of a market failure to conserve a resource resulting from poorly defined property rights?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In modern economies, the cost of raising children has

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
New drilling technologies like hydraulic...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Energy economics studies how people deal...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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