Question 1

Refer to the diagram, representing Slippery Slope Oil Company. A $5 decrease in the user cost would

Accepted Answer

A)  decrease the optimal quantity extracted in the present.
B)  increase the optimal quantity extracted in the present.
C)  not affect the optimal quantity extracted in the present.
D)  reduce extraction costs in the present.E) A) and D)
F) A) and C)

Question 2

It is generally easier to prevent deforestation than fishery collapse because

Accepted Answer

A)  it is easier to establish and enforce property rights on national lands than in international waters.
B)  there is greater incentive to have sustainable forests than sustainable fisheries.
C)  the demand for wood products has dropped significantly, while the demand for fish has grown significantly.
D)  All of the other possible answers are correct.E) A) and D)
F) A) and B)

Question 3

Refer to the diagram, representing Slippery Slope Oil Company. A $10 increase in the user cost would shift

Accepted Answer

A)  up the extraction cost curve only and reduce the amount of oil extracted in the present.
B)  up both the extraction cost and total cost curves and reduce the amount of oil extracted in the present.
C)  up the total cost curve only and reduce the amount of oil extracted in the present.
D)  down the total cost curve and increase the amount of oil extracted in the future.E) A) and C)
F) None of the above

Question 4

The key to optimally managing renewable and nonrenewable resources is to design incentive structures that

Accepted Answer

A)  reduce the costs of production to the lowest possible level.
B)  increase the benefits from production to the highest possible level.
C)  weigh the net benefits of current use with the net benefits of future use.
D)  add the net benefits of current use to the net benefits of future use.E) A) and B)
F) B) and C)

Question 5

According to data from the UN Food and Agriculture Organization, which of the following nations saw a significant decline in the amount of land covered by forests in the period 2010-2015?

Accepted Answer

A)  Thailand
B)  China
C)  Togo
D)  United StatesE) A) and D)
F) A) and B)

Question 6

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, what is the minimum amount per ton that Melanie would have to offer Oli to convince him to sell Melanie his ITQs?

Accepted Answer

A)  $8.
B)  $10.
C)  $12.
D)  $20.E) A) and C)
F) None of the above

Question 7

Refer to the diagram, representing Slippery Slope Oil Company. What price of oil would make 15 million barrels the optimal quantity to extract and sell this year?

Accepted Answer

A)  50
B)  110
C)  70
D)  90E) A) and B)
F) B) and C)

Question 8

In time-value of money analysis, an increase in interest rates

Accepted Answer

A)  raises the present value of a future amount.
B)  lowers the present value of a future amount.
C)  lowers the future value of a present amount.
D)  has no effect on present or future amount.E) A) and B)
F) None of the above

Question 9

Productive inputs capable of replacing themselves if harvested at moderate rates are known as

Accepted Answer

A)  renewable natural resources.
B)  natural capital.
C)  nonrenewable natural resources.
D)  fossil fuels.E) C) and D)
F) A) and D)

Question 10

Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ and the current market price is $5 per ton. If Dave offered to sell his ITQ to Sue for $2,000, he and Sue would

Accepted Answer

A)  make the sale because they're both better off.
B)  not make the sale, because Sue is better off and Dave is not.
C)  not make the sale, because Dave is better of and Sue is not.
D)  not make the sale, because neither is better off.E) None of the above
F) A) and D)

Question 11

Individual transferable quotas (ITQs)

Accepted Answer

A)  promote efficiency and limit catches.
B)  promote efficiency in production but still lead to overfishing.
C)  limit catches but encourage production cost increases that are inefficient.
D)  have failed to limit catches or promote efficiency.E) B) and C)
F) A) and B)

Question 12

Renewable resources

Accepted Answer

A)  can never be exhausted permanently.
B)  can be exhausted if harvest rates exceed replenishment rates for an extended period.
C)  can be exhausted if replenishment rates exceed harvest rates for an extended period.
D)  will tend to be overharvested when they are private property.E) C) and D)
F) A) and C)

Question 13

The real cost of buying a market basket of 25 important commodities in 2019 compared to the cost in the 1845-1850 base period in The Economist's Commodity Price Index is

Accepted Answer

A)  higher by about 100 percent.
B)  about the same or equal.
C)  lower by about 60 percent.
D)  higher by about 50 percent.E) B) and D)
F) C) and D)

Question 14

If the world runs out of oil, it will also run out of energy.

Accepted Answer

A) True 
 B)False

Question 15

Alex and Belle are both loggers wanting to harvest timber from the same forest. Alex prefers to harvest and replant at a sustainable rate; Belle wants to harvest as many trees as possible to maximize short-run profit and then move on. They face the same production costs. If property rights are well-defined and enforced,

Accepted Answer

A)  Alex could buy Belle's part of the land and harvest and replant in a sustainable manner.
B)  Belle could buy Alex's part of the land and harvest all the timber as quickly as possible.
C)  Incentives to harvest and replant in a sustainable manner are greater than with no property rights.
D)  Any of the results described in the other possible answers could occur in this situation.E) B) and D)
F) A) and D)

Question 16

What was the largest U.S. fishery, in dollar terms, in 2016?

Accepted Answer

A)  Pacific halibut
B)  sea scallop
C)  walleye pollock
D)  lobsterE) A) and D)
F) A) and C)

Question 17

The primary focus of natural resource economics is to develop policies for harvesting or extracting natural resources that

Accepted Answer

A)  minimize the net costs from doing so.
B)  maximize the net benefits from doing so.
C)  minimize the negative externalities of doing so.
D)  maximize the positive externalities of doing so. E) B) and C)
F) None of the above

Question 18

In the United States in 2017, one million BTUs of energy yielded _______ worth of goods and services (in 2009 dollars) .

Accepted Answer

A)  $57.90
B)  $63.09
C)  $162.07
D)  $184.55E) A) and B)
F) B) and C)

Question 19

Renewable natural resources can never be exhausted.

Accepted Answer

A) True 
 B)False

Question 20

Because of Environmental Protection Agency pollution credits to biodiesel producers, biodiesel becomes economically viable (as or less costly than using oil) when oil prices reach _____ or more per barrel.

Accepted Answer

A)  $110
B)  $55
C)  $80
D)  $127E) C) and D)
F) A) and D)

Exam 19: Natural Resource and Energy Economics

According to data from the UN Food and Agriculture Organization, which of the following nations saw a significant decline in the amount of land covered by forests in the period 2010-2015?

Correct Answer
verified

What was the largest U.S. fishery, in dollar terms, in 2016?

Correct Answer
verified

In time-value of money analysis, an increase in interest rates

Correct Answer
verified

The real cost of buying a market basket of 25 important commodities in 2019 compared to the cost in the 1845-1850 base period in The Economist's Commodity Price Index is

Correct Answer
verified

The key to optimally managing renewable and nonrenewable resources is to design incentive structures that

Correct Answer
verified

Renewable natural resources can never be exhausted.

Correct Answer
verified

In the United States in 2017, one million BTUs of energy yielded _______ worth of goods and services (in 2009 dollars) .

Correct Answer
verified

Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ and the current market price is $5 per ton. If Dave offered to sell his ITQ to Sue for $2,000, he and Sue would

Correct Answer
verified

If the world runs out of oil, it will also run out of energy.

Correct Answer
verified

Correct Answer
verified

The primary focus of natural resource economics is to develop policies for harvesting or extracting natural resources that

Correct Answer
verified

Renewable resources

Correct Answer
verified

Refer to the diagram, representing Slippery Slope Oil Company. A $10 increase in the user cost would shift

Correct Answer
verified

Refer to the diagram, representing Slippery Slope Oil Company. What price of oil would make 15 million barrels the optimal quantity to extract and sell this year?

Correct Answer
verified

Because of Environmental Protection Agency pollution credits to biodiesel producers, biodiesel becomes economically viable (as or less costly than using oil) when oil prices reach _____ or more per barrel.

Correct Answer
verified

Correct Answer
verified

Refer to the diagram, representing Slippery Slope Oil Company. A $5 decrease in the user cost would

Correct Answer
verified

It is generally easier to prevent deforestation than fishery collapse because

Correct Answer
verified

Individual transferable quotas (ITQs)

Correct Answer
verified

Productive inputs capable of replacing themselves if harvested at moderate rates are known as

Correct Answer
verified

Exam 19: Natural Resource and Energy Economics

According to data from the UN Food and Agriculture Organization, which of the following nations saw a significant decline in the amount of land covered by forests in the period 2010-2015?

Correct AnswerverifiedShow Answer

What was the largest U.S. fishery, in dollar terms, in 2016?

Correct AnswerverifiedShow Answer

In time-value of money analysis, an increase in interest rates

Correct AnswerverifiedShow Answer

The real cost of buying a market basket of 25 important commodities in 2019 compared to the cost in the 1845-1850 base period in The Economist's Commodity Price Index is

Correct AnswerverifiedShow Answer

The key to optimally managing renewable and nonrenewable resources is to design incentive structures that

Correct AnswerverifiedShow Answer

Renewable natural resources can never be exhausted.

Correct AnswerverifiedShow Answer

In the United States in 2017, one million BTUs of energy yielded _______ worth of goods and services (in 2009 dollars) .

Correct AnswerverifiedShow Answer

Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ and the current market price is $5 per ton. If Dave offered to sell his ITQ to Sue for $2,000, he and Sue would

Correct AnswerverifiedShow Answer

If the world runs out of oil, it will also run out of energy.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The primary focus of natural resource economics is to develop policies for harvesting or extracting natural resources that

Correct AnswerverifiedShow Answer

Renewable resources

Correct AnswerverifiedShow Answer

Refer to the diagram, representing Slippery Slope Oil Company. A $10 increase in the user cost would shift

Correct AnswerverifiedShow Answer

Refer to the diagram, representing Slippery Slope Oil Company. What price of oil would make 15 million barrels the optimal quantity to extract and sell this year?

Correct AnswerverifiedShow Answer

Because of Environmental Protection Agency pollution credits to biodiesel producers, biodiesel becomes economically viable (as or less costly than using oil) when oil prices reach _____ or more per barrel.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the diagram, representing Slippery Slope Oil Company. A $5 decrease in the user cost would

Correct AnswerverifiedShow Answer

It is generally easier to prevent deforestation than fishery collapse because

Correct AnswerverifiedShow Answer

Individual transferable quotas (ITQs)

Correct AnswerverifiedShow Answer

Productive inputs capable of replacing themselves if harvested at moderate rates are known as

Correct AnswerverifiedShow Answer

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