Question 1

Since 1950, the price of crude oil, corrected for inflation, has

Accepted Answer

A) gone steadily upward. 
B) generally declined, with brief price spikes upward in 1973 and 1987. 
C) showed one peak in the early 1980s and another substantial rise after 2000, but otherwise showed little trend. 
D) changed very little, in real terms. 
A) gone steadily upward. 
B) generally declined, with brief price spikes upward in 1973 and 1987. 
C) showed one peak in the early 1980s and another substantial rise after 2000, but otherwise showed little trend. 
D) changed very little, in real terms.

Question 2

Technological advances in agriculture (such as chemical fertilizers and harvesting equipment) have helped to preserve and grow forest land because they

Accepted Answer

A) reduce the amount of land needed to grow food. 
B) result in a larger population. 
C) are made from timber. 
D) None of the above. 
A) reduce the amount of land needed to grow food. 
B) result in a larger population. 
C) are made from timber. 
D) None of the above.

Question 3

While the price of a resource may increase sharply during some periods, the structure of ____ accompanying the price increase makes depletion highly unlikely and provides the seeds for future reversal.

Accepted Answer

A) government programs 
B) foreign competition 
C) incentives 
D) taxation 
A) government programs 
B) foreign competition 
C) incentives 
D) taxation

Question 4

Supply and demand analysis suggests that a sharp increase in the price of gasoline will cause the

Accepted Answer

A) price of fuel-efficient compact cars to decrease. 
B) supply of gasoline to decrease. 
C) demand for large luxury cars to increase. 
D) demand for fuel-efficient cars to increase. 
A) price of fuel-efficient compact cars to decrease. 
B) supply of gasoline to decrease. 
C) demand for large luxury cars to increase. 
D) demand for fuel-efficient cars to increase.

Question 5

Researcher Terry Anderson claims that with respect to the supply of water, trading it would be

Accepted Answer

A) wrong and counter-productive. 
B) essentially impossible due to lack of technologies to move the water. 
C) highly productive and bring cooperation among the traders. 
D) a problem, since monopolists would come to own too much. 
A) wrong and counter-productive. 
B) essentially impossible due to lack of technologies to move the water. 
C) highly productive and bring cooperation among the traders. 
D) a problem, since monopolists would come to own too much.

Question 6

How are the economic forces that govern renewable resources different than those that govern non-renewable resources?

Accepted Answer

A) Non-renewable resources must be protected by government policies to prevent depletion. 
B) Once non-renewable resources are used up they are gone forever. 
C) Both renewable and non-renewable resources have become scarcer over time so the economic forces at work are the same. 
D) Renewable resources are not subject to the laws of economics since the scarcity condition no longer holds. 
A) Non-renewable resources must be protected by government policies to prevent depletion. 
B) Once non-renewable resources are used up they are gone forever. 
C) Both renewable and non-renewable resources have become scarcer over time so the economic forces at work are the same. 
D) Renewable resources are not subject to the laws of economics since the scarcity condition no longer holds.

Question 7

Researcher Indur Goklany has estimated that if traditional technologies, like those used in 1961, were still in use, other things equal, wildlife habitat

Accepted Answer

A) would be more abundant and far healthier today. 
B) would have increased, benefiting wildlife substantially. 
C) would have declined substantially, as the need for farmland would not have declined as it did. 
D) would have been unaffected. 
A) would be more abundant and far healthier today. 
B) would have increased, benefiting wildlife substantially. 
C) would have declined substantially, as the need for farmland would not have declined as it did. 
D) would have been unaffected.

Question 8

Resources that are not created or renewed at a significant rate, and therefore could potentially be used up over time, are called

Accepted Answer

A) renewable resources. 
B) nonrenewable resources. 
C) fixed resources. 
D) earthly geographic resources. 
A) renewable resources. 
B) nonrenewable resources. 
C) fixed resources. 
D) earthly geographic resources.

Question 9

Generally, the demand for energy in the long run will be

Accepted Answer

A) approximately equal in elasticity to the demand for energy in the short run. 
B) considerably less elastic than in the short run. 
C) considerably more elastic than in the short run. 
D) perfectly inelastic because we must have energy to survive. 
A) approximately equal in elasticity to the demand for energy in the short run. 
B) considerably less elastic than in the short run. 
C) considerably more elastic than in the short run. 
D) perfectly inelastic because we must have energy to survive.

Question 10

The concept of "proved reserves" refers to the amount of a resource that can be produced

Accepted Answer

A) in one year's time. 
B) in the next 10 years. 
C) before it runs out. 
D) at current levels of expected prices and technology. 
A) in one year's time. 
B) in the next 10 years. 
C) before it runs out. 
D) at current levels of expected prices and technology.

Question 11

Predictions of severe shortages due to impending natural resource depletion

Accepted Answer

A) are widely accepted by resource economists even though such predictions are a relatively new occurrence. 
B) have been wrong in the past, but most resource economists believe that the threat of resource depletion is now far more severe than ever before. 
C) are typically made without adequate recognition and consideration of resource price elasticities. 
D) typically assume that price elasticities are greater than they really are. 
A) are widely accepted by resource economists even though such predictions are a relatively new occurrence. 
B) have been wrong in the past, but most resource economists believe that the threat of resource depletion is now far more severe than ever before. 
C) are typically made without adequate recognition and consideration of resource price elasticities. 
D) typically assume that price elasticities are greater than they really are.

Question 12

What can be said about the demand and supply of natural resources?

Accepted Answer

A) The quantity demanded of a natural resource will generally be less responsive to a change in price in the long run than in the short run. 
B) The supply of a natural resource will generally be more responsive to a price change in the long run than in the short run. 
C) The supply of a natural resource is fixed by nature; it cannot be responsive to a price change in the long run. 
D) None of the above is correct. 
A) The quantity demanded of a natural resource will generally be less responsive to a change in price in the long run than in the short run. 
B) The supply of a natural resource will generally be more responsive to a price change in the long run than in the short run. 
C) The supply of a natural resource is fixed by nature; it cannot be responsive to a price change in the long run. 
D) None of the above is correct.

Question 13

In the Central Utah Project, the water delivered from dams to users

Accepted Answer

A) is very well utilized, because planners allocated water to its highest valued uses and users. 
B) cannot generally be traded, so is often wastefully used in low-valued uses. 
C) is often sold to water-short cities by farmers who can then enjoy a profit from the sale. 
D) is very expensive to the users who get it. 
A) is very well utilized, because planners allocated water to its highest valued uses and users. 
B) cannot generally be traded, so is often wastefully used in low-valued uses. 
C) is often sold to water-short cities by farmers who can then enjoy a profit from the sale. 
D) is very expensive to the users who get it.

Question 14

Empirical evidence suggests that the relative scarcity of most resources is

Accepted Answer

A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged over the past four decades. 
A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged over the past four decades.

Question 15

"Doomsday" predictions about the imminent depletion of one or more of our vital natural resources usually are

Accepted Answer

A) correct but are not reflected by relative price changes within our market economy. 
B) overstated because of arithmetic calculation mistakes. 
C) overstated because they disregard human responses to relative price changes. 
D) understated because substitutes for such natural resources are also becoming less available. 
A) correct but are not reflected by relative price changes within our market economy. 
B) overstated because of arithmetic calculation mistakes. 
C) overstated because they disregard human responses to relative price changes. 
D) understated because substitutes for such natural resources are also becoming less available.

Question 16

Water shortages are usually the result of

Accepted Answer

A) profit-seeking owners of the resource holding water off the market and refusing to trade. 
B) bad forecasts by water planners. 
C) monopoly fixing of water prices. 
D) a lack of tradeable property rights in water. 
A) profit-seeking owners of the resource holding water off the market and refusing to trade. 
B) bad forecasts by water planners. 
C) monopoly fixing of water prices. 
D) a lack of tradeable property rights in water.

Question 17

The supply of oil for users in the United States

Accepted Answer

A) was never an issue of serious public concern until the 1970s. 
B) has never been an issue of serious concern by political leaders. 
C) has often been a topic for dire warnings and forecasts of oil depletion. 
D) has been more and more in doubt since the early 1980s. 
A) was never an issue of serious public concern until the 1970s. 
B) has never been an issue of serious concern by political leaders. 
C) has often been a topic for dire warnings and forecasts of oil depletion. 
D) has been more and more in doubt since the early 1980s.

Question 18

The overall trend in resource prices has been

Accepted Answer

A) upward. 
B) downward. 
C) constant. 
D) increasing exponentially. 
A) upward. 
B) downward. 
C) constant. 
D) increasing exponentially.

Question 19

Empirical evidence suggests that the relative scarcity of most resources is

Accepted Answer

A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged. 
A) declining. 
B) increasing slowly. 
C) increasing rapidly. 
D) largely unchanged.

Question 20

Suppose that new demands greatly reduce the proved reserves of titanium to unexpectedly low levels, and it appears that the new demands will continue. If the market price is unregulated, we should expect that the price will

Accepted Answer

A) rise sharply, calling forth added exploration and more effective (and more costly) recovery methods, resulting in additional new supplies of titanium. 
B) rise sharply, calling forth new ways for manufacturers to conserve titanium and to find substitutes for it. 
C) over time, bring the quantity supplied of titanium into balance with the quantity demanded. 
D) do all of the above. 
A) rise sharply, calling forth added exploration and more effective (and more costly) recovery methods, resulting in additional new supplies of titanium. 
B) rise sharply, calling forth new ways for manufacturers to conserve titanium and to find substitutes for it. 
C) over time, bring the quantity supplied of titanium into balance with the quantity demanded. 
D) do all of the above.

Exam 26: Appendix: the Question of Resource Exhaustion

Since 1950, the price of crude oil, corrected for inflation, has

Technological advances in agriculture (such as chemical fertilizers and harvesting equipment) have helped to preserve and grow forest land because they

While the price of a resource may increase sharply during some periods, the structure of ____ accompanying the price increase makes depletion highly unlikely and provides the seeds for future reversal.

Supply and demand analysis suggests that a sharp increase in the price of gasoline will cause the

Researcher Terry Anderson claims that with respect to the supply of water, trading it would be

How are the economic forces that govern renewable resources different than those that govern non-renewable resources?

Researcher Indur Goklany has estimated that if traditional technologies, like those used in 1961, were still in use, other things equal, wildlife habitat

Resources that are not created or renewed at a significant rate, and therefore could potentially be used up over time, are called

Generally, the demand for energy in the long run will be

The concept of "proved reserves" refers to the amount of a resource that can be produced

Predictions of severe shortages due to impending natural resource depletion

What can be said about the demand and supply of natural resources?

In the Central Utah Project, the water delivered from dams to users

Empirical evidence suggests that the relative scarcity of most resources is

"Doomsday" predictions about the imminent depletion of one or more of our vital natural resources usually are

Water shortages are usually the result of

The supply of oil for users in the United States

The overall trend in resource prices has been

Empirical evidence suggests that the relative scarcity of most resources is

Suppose that new demands greatly reduce the proved reserves of titanium to unexpectedly low levels, and it appears that the new demands will continue. If the market price is unregulated, we should expect that the price will

The Economic Approach

A: Some Tools of the Economist

B: Some Tools of the Economist

A: Supply, Demand, and the Market Process

B: Supply, Demand, and the Market Process

A: Supply and Demand: Applications and Extensions

B: Supply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Consumer Choice and Elasticity

A: Costs and the Supply of Goods

B: Costs and the Supply of Goods

A: Price Takers and the Competitive Process

B: Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

A: Price-Searcher Markets With High Entry Barriers

B: Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Appendix: Government Spending and Taxation

Appendix: the Economics of Social Security

Appendix: the Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Appendix: Great Debates in Economics: Keynes Versus Hayek

Appendix: the Crisis of 2008: Causes and Lessons for the Future

Appendix: Lessons From the Great Depression

Appendix: the Economics of Healthcare

Appendix:education: Problems and Performance

Appendix: Earnings Differences Between Men and Women

Appendix: Do Labor Unions Increase the Wages of Workers

Appendix: Difficult Environmental Cases and the Role of Government

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