Question 1

The influence of agricultural technologies on farm land in the United States has been

Accepted Answer

A) very little up until now. 
B) substantial, as greater productivity per acre reduced the need for farmland. 
C) substantial; the productivity of much farm land has been destroyed by new technologies and may never be useful again. 
D) to make farmland less productive over time as the minerals In the soil are used up. 
A) very little up until now. 
B) substantial, as greater productivity per acre reduced the need for farmland. 
C) substantial; the productivity of much farm land has been destroyed by new technologies and may never be useful again. 
D) to make farmland less productive over time as the minerals In the soil are used up.

Question 2

Higher prices for natural resources are

Accepted Answer

A) a natural and inevitable result of resource depletion. 
B) not possible for more than a short time, as technological advances clearly guarantee falling resource prices. 
C) not the story of the last two centuries, because resource prices have decline through most of this period. 
D) the major cause of resource shortages in the world. 
A) a natural and inevitable result of resource depletion. 
B) not possible for more than a short time, as technological advances clearly guarantee falling resource prices. 
C) not the story of the last two centuries, because resource prices have decline through most of this period. 
D) the major cause of resource shortages in the world.

Question 3

When the price of gasoline increases substantially, many consumers will

Accepted Answer

A) turn to fuel saving alternatives like hybrid vehicles. 
B) drive less. 
C) take public transportation. 
D) all of the above are true. 
A) turn to fuel saving alternatives like hybrid vehicles. 
B) drive less. 
C) take public transportation. 
D) all of the above are true.

Question 4

Compared with 1920, the United States today has

Accepted Answer

A) far less forest land. 
B) far more forest land. 
C) about the same amount of forest land. 
D) far fewer trees growing per acre of forest land. 
A) far less forest land. 
B) far more forest land. 
C) about the same amount of forest land. 
D) far fewer trees growing per acre of forest land.

Question 5

Economic theory indicates that the amount consumed of a natural resource depends on

Accepted Answer

A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above. 
A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above.

Question 6

Predictions that natural resources such as oil will be essentially used up in the next few decades

Accepted Answer

A) have been frequently made for the past century but have always proven to be false. 
B) have usually been based on the quantity of proved reserves. 
C) have ignored the role of price in governing the quantities demanded and supplied. 
D) All of the above are correct. 
A) have been frequently made for the past century but have always proven to be false. 
B) have usually been based on the quantity of proved reserves. 
C) have ignored the role of price in governing the quantities demanded and supplied. 
D) All of the above are correct.

Question 7

"If China and India continue their economic expansion, the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement.

Accepted Answer

A) True, increased demand from developing countries will swamp the existing supply of resources. 
B) True, increased demand from China and India will lead to large shortages in the North America and Europe. 
C) False, the shortage will be limited to China and India. 
D) False, increasing scarcity will result in higher prices and the deployment of new technologies that increase the efficiency of production, and together these markets forces will help to balance demand and supply worldwide. 
A) True, increased demand from developing countries will swamp the existing supply of resources. 
B) True, increased demand from China and India will lead to large shortages in the North America and Europe. 
C) False, the shortage will be limited to China and India. 
D) False, increasing scarcity will result in higher prices and the deployment of new technologies that increase the efficiency of production, and together these markets forces will help to balance demand and supply worldwide.

Question 8

Resource markets are like any other market in that

Accepted Answer

A) the increase in quantity supplied in response to a higher price will generally be greater in the long run than in the short run. 
B) the amount demanded of a resource is inversely related to its price. 
C) higher prices encourage people to search for substitutes. 
D) all of the above are correct. 
A) the increase in quantity supplied in response to a higher price will generally be greater in the long run than in the short run. 
B) the amount demanded of a resource is inversely related to its price. 
C) higher prices encourage people to search for substitutes. 
D) all of the above are correct.

Question 9

Water, when it is not tradeable among current and potential users, is often kept that way

Accepted Answer

A) by governments who demand tight controls on who gets the water. 
B) by nature, as water cannot be easily moved from place to place in large quantities. 
C) to protect fish and other wildlife, rather than for any other reason. 
D) by monopoly owners in the private sector. 
A) by governments who demand tight controls on who gets the water. 
B) by nature, as water cannot be easily moved from place to place in large quantities. 
C) to protect fish and other wildlife, rather than for any other reason. 
D) by monopoly owners in the private sector.

Question 10

If proved reserves of a mineral amount to twelve years of use at the current rate of consumption,

Accepted Answer

A) it is likely, though not certain, that we will run out of that mineral in about twelve years. 
B) we are likely to run out of the mineral in less than twelve years if our rate of use has been increasing. 
C) if the good becomes more scarce relative to supply in the future, its price will rise and thereby encourage both conservation and exploration. 
D) if proved reserves diminish, lower prices will extend the day of exhaustion well into the future. 
A) it is likely, though not certain, that we will run out of that mineral in about twelve years. 
B) we are likely to run out of the mineral in less than twelve years if our rate of use has been increasing. 
C) if the good becomes more scarce relative to supply in the future, its price will rise and thereby encourage both conservation and exploration. 
D) if proved reserves diminish, lower prices will extend the day of exhaustion well into the future.

Question 11

If the prices of energy products rise sharply, consumers will most likely

Accepted Answer

A) sharply reduce their consumption of these products in both the short run and the long run. 
B) reduce their consumption of these products slightly in the short run and more sharply in the long run. 
C) reduce their consumption of these products sharply in the short run, but in the long run consumption will fall by only a small amount. 
D) increase their consumption of these products slightly in the short run and more sharply in the long run. 
A) sharply reduce their consumption of these products in both the short run and the long run. 
B) reduce their consumption of these products slightly in the short run and more sharply in the long run. 
C) reduce their consumption of these products sharply in the short run, but in the long run consumption will fall by only a small amount. 
D) increase their consumption of these products slightly in the short run and more sharply in the long run.

Question 12

Why do water supply problems exist in many parts of the world?

Accepted Answer

A) Efforts to build large-scale reservoirs in arid countries have stalled due to the enormous expense involved in completing these projects. 
B) Water markets are missing or incomplete. 
C) Global warming has increased the evaporation rate of water by over 10%. 
D) The water supply is unfit for public consumption in many areas due to pollution. 
A) Efforts to build large-scale reservoirs in arid countries have stalled due to the enormous expense involved in completing these projects. 
B) Water markets are missing or incomplete. 
C) Global warming has increased the evaporation rate of water by over 10%. 
D) The water supply is unfit for public consumption in many areas due to pollution.

Question 13

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 rise and

Accepted Answer

A) increase exploration and encourage more effective recovery methods, resulting in additional new supplies of titanium. 
B) encourage consumers and manufacturers to conserve titanium. 
C) increase the incentive to find and use substitutes for titanium. 
D) All of the above. 
A) increase exploration and encourage more effective recovery methods, resulting in additional new supplies of titanium. 
B) encourage consumers and manufacturers to conserve titanium. 
C) increase the incentive to find and use substitutes for titanium. 
D) All of the above.

Question 14

Proved reserves are likely to underestimate the total quantity of the resource in the ground because

Accepted Answer

A) of flaws in information flows between countries. 
B) government agencies have an incentive to keep reserves secret. 
C) of future improvements in technology and higher future prices. 
D) scientists have not been able to use the latest techniques to estimate reserves in less developed countries. 
A) of flaws in information flows between countries. 
B) government agencies have an incentive to keep reserves secret. 
C) of future improvements in technology and higher future prices. 
D) scientists have not been able to use the latest techniques to estimate reserves in less developed countries.

Question 15

Doomsday forecasts about running out of natural resources, with dire consequences,

Accepted Answer

A) have occurred at least as far back in time as the 16th century. 
B) have generally been correct, and resources today are nearly all rising in price. 
C) seldom are taken seriously enough by the public. 
D) began to be heard for the first time after Earth Day of 1970. 
A) have occurred at least as far back in time as the 16th century. 
B) have generally been correct, and resources today are nearly all rising in price. 
C) seldom are taken seriously enough by the public. 
D) began to be heard for the first time after Earth Day of 1970.

Question 16

Forests in the United States, starting from the time the colonists arrived,

Accepted Answer

A) have always expanded. 
B) have only shrunk in size. 
C) have changed little. 
D) shrank as they were logged and cleared for farms, then rebounded, especially in the twentieth century. 
A) have always expanded. 
B) have only shrunk in size. 
C) have changed little. 
D) shrank as they were logged and cleared for farms, then rebounded, especially in the twentieth century.

Question 17

The amount of a resource consumed depends on

Accepted Answer

A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above. 
A) the price of the resource. 
B) consumer income. 
C) the price of substitute resources. 
D) all of the above.

Question 18

Water supply problems are generally the result of

Accepted Answer

A) missing or incomplete markets for water. 
B) too much trading of water. 
C) too few government subsidies to desalination. 
D) all of the above. 
A) missing or incomplete markets for water. 
B) too much trading of water. 
C) too few government subsidies to desalination. 
D) all of the above.

Question 19

Proved reserves of petroleum are

Accepted Answer

A) the verified quantity of petroleum that can be recovered at current prices and levels of technology. 
B) the only reserves likely to be available in the future. 
C) refined products awaiting shipment to the market. 
D) the total amount of the resource in existence, regardless of the productive effort undertaken to expand the future availability of the resource. 
A) the verified quantity of petroleum that can be recovered at current prices and levels of technology. 
B) the only reserves likely to be available in the future. 
C) refined products awaiting shipment to the market. 
D) the total amount of the resource in existence, regardless of the productive effort undertaken to expand the future availability of the resource.

Question 20

In the United States, water purchases from the government

Accepted Answer

A) always cover the costs of water delivery. 
B) are often subsidized for the user of water. 
C) are not subsidized, because that would be inefficient. 
D) almost never occur. 
A) always cover the costs of water delivery. 
B) are often subsidized for the user of water. 
C) are not subsidized, because that would be inefficient. 
D) almost never occur.

Exam 26: Appendix: the Question of Resource Exhaustion

The influence of agricultural technologies on farm land in the United States has been

Higher prices for natural resources are

When the price of gasoline increases substantially, many consumers will

Compared with 1920, the United States today has

Economic theory indicates that the amount consumed of a natural resource depends on

Predictions that natural resources such as oil will be essentially used up in the next few decades

"If China and India continue their economic expansion, the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement.

Resource markets are like any other market in that

Water, when it is not tradeable among current and potential users, is often kept that way

If proved reserves of a mineral amount to twelve years of use at the current rate of consumption,

If the prices of energy products rise sharply, consumers will most likely

Why do water supply problems exist in many parts of the world?

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 rise and

Proved reserves are likely to underestimate the total quantity of the resource in the ground because

Doomsday forecasts about running out of natural resources, with dire consequences,

Forests in the United States, starting from the time the colonists arrived,

The amount of a resource consumed depends on

Water supply problems are generally the result of

Proved reserves of petroleum are

In the United States, water purchases from the government

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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