Exam 19: Natural Resource and Energy Economics

A farmer discovers a natural gas reserve on his property. He can extract the natural gas for a profit of $70 per unit now, $72 per unit in one year, $74 per unit in two years, and $76 in three years. The current market rate of interest is 4 percent. When should the farmer extract the natural gas to obtain the most profit per unit in present value terms?

Commodity prices are relatively stable from year to year.

Power plants with the lowest operating costs tend to

Most developed countries have fertility rates less than 2.1.

A fishery is typically identified by

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). 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?

In the United States and parts of Western Europe, strong property rights over forests have been established.

A company's extraction cost curve slopes upward to reflect

Elephant populations have

The user cost of nonrenewable resources is

Which of the following is considered a nonrenewable natural resource?

An electricity company is considering damming a small river to generate electricity at a cost of $160,000 and a profit of $200,000 in 5 years. The current market rate of interest is 5 percent. Should the company make the investment?

World commodity prices over the past 170 years have

Most economists view economic growth as

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, what is the maximum amount Kara would be willing to pay per ton for Kyle's ITQs?

Data from the U.S. Energy Information Administration on per capita energy consumption in the United States for the period 1950-2017 show that it has

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

The period since the Industrial Revolution has been extraordinary because, despite unprecedented

ACME Corporation used to produce $50 worth of goods (in 2000 dollars)per million BTUs used. Now it produces $60 worth of goods (in 2000 dollars)per million BTUs. Based on this, we can conclude

A total fertility rate of approximately 1.0 will cause each generation to be half as large as the preceding generation.