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Exam 19: Natural Resource and Energy Economics

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Question 61

Multiple Choice

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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?

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

E) B) and D)
F) B) and C)

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Question 62

Multiple Choice

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Extraction costs of a nonrenewable resource include the

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.

E) All of the above
F) None of the above

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Question 63

Multiple Choice

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

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

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?

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

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

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

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

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

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

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

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

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

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.

Which of the following is considered a renewable natural resource?

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

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

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

Some nations are increasing the amount of land covered by forests, while others are experiencing rapid deforestation. According to economists, this is largely because