1. What was the largest U.S. fishery, in dollar terms, in 2007?
B) Lobster.
C) Walleye Pollock.
D) Sea Scallop. 2. The table below shows the quantity of gold bars (Qb) in thousands, the extraction cost for each thousand bars (in millions of dollars), and user cost of each thousand bars (in millions of dollars) facing the OZ Mining Company this year.
Refer to the data above. Suppose that a new government regulation is going to shut down OZ's mining operation 1 year from now. If the current price per bar of gold is $25,000, how many bars (in thousands) should OZ extract and sell this year?
A) 3.
B) 4.
C) 5. 3. Over the past two decades, total and per capita water use in the United States have:
B) leveled off and fallen, respectively. 4. Alex and Ben are both loggers wanting to harvest timber from the same forest. Alex prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees as possible to maximize short-run profit, and then move on. They face the same production costs. Refer to the information above. The forest is more likely to be harvested and replanted at a sustainable rate if:
A) property rights are well-defined and enforced. 5. Refer to the diagram above, representing Slippery Slope Oil Company. A $10 increase in the user cost would shift:
A) up the extraction cost curve only, 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. 6. Total Allowable Catch policies and Individual Transferable Quotas both:
B) limit catch sizes, but TACs promote inefficiency.
C) promote efficiency, but only TACs limit catch sizes.
D) promote efficiency, but only ITQs limit catch sizes. 7. Alex and Ben are both loggers wanting to harvest timber from the same forest. Alex prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees as possible to maximize short-run profit, and then move on. They face the same production costs.
Refer to the information above. If no explicit property right is given over the forest land, then:
A) a property right will be established when trees are cut down and brought to market.
B) there is no property right over the harvested timber.
D) that implies that government owns and regulates its use. 8. In fisheries management, a fishery is defined as:
B) a stock of fish or other marine animals that can be thought of as a logically distinct group. 9. Forestry companies typically harvest and replant an area when trees are:
C) near the end of their rapid growth period. 10. 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.
Refer to the information above. 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?
A) $8.
B) $10.
D) $12. 1. Which of the following would cause the present optimal extraction level of a non-renewable resource to fall?
D) A reduction in the price of the resource. 2. Productive inputs capable of replacing themselves if harvested at moderate rates are known as:
A) renewable natural resources.
3. Refer to the diagram above, representing Slippery Slope Oil Company. How many million barrels should Slippery Slope extract and sell this year?
A) 5.
C) 15.
D) It cannot be determined with the information given. 4. The table below shows the quantity of gold bars (Qb) in thousands, the extraction cost for each thousand bars (in millions of dollars), and user cost of each thousand bars (in millions of dollars) facing the OZ Mining Company this year.
Refer to the data above. Suppose that a new government regulation is going to shut down OZ's mining operation 1 year from now. Assuming that all gold extracted is sold in the same year (cannot be stockpiled for later sale), how will the regulation affect the user cost?
B) The effect on the user cost cannot be determined.
C) The user cost will rise because the rate of extraction will rise.
D) The user cost will become zero because they will not be able to extract in the future. 5. If per capita trash generation is constant over time, this implies that:
A) per capita consumption of solids has also been constant.
B) per capita consumption of goods and services has also been constant.
C) total consumption of solids has also been constant. 6. As of 2010, the world's population is approximately:
A) 6.8 billion.
B) 5.2 billion.
D) 1.2 trillion. 7. The total fertility rate:
A) measures the average number of children that a woman is expected to have during her lifetime. 8. Which of the following would cause the present optimal extraction level of a non-renewable resource to fall?
A) An increase in the present value of expected future profits.
B) A decrease in extraction costs.
C) A decrease in user costs. 9. (Consider This) Dozens of companies that convert corn sugars into ethanol:
A) went bankrupt in 2008 and 2009 despite receiving $50 per barrel government subsidies to product ethanol. 10. Rapid population growth since 1800 has occurred primarily because of:
B) a significant reduction in death rates as living standards have risen.
1. In energy economics, "BTU" stands for:
C) British Thermal Unit. 2. A profit-maximizing company should extract a non-renewable resource in the present up to the quantity where the:
A) selling price of the resource equals the extraction cost plus the user cost of the resource. 3. Property rights for fish from the open ocean:
D) exist once the fish are caught. 4. In countries like Botswana and Zimbabwe, local villages have been given property rights over local elephants with the result that elephant populations:
B) have grown as villagers have protected the elephants to support their tourist industry. 5. The total fertility rate necessary to keep the population constant is approximately equal to:
C) 2.1. 6. Since 1950, the energy efficiency of the United States economy in terms of producing goods and services has:
A) not changed.
B) more than doubled.
D) risen more than threefold. 7. Higher interest rates will, all else equal:
B) increase the user cost of extracting a resource.
C) reduce the user cost of extracting a resource.
D) have no impact on either the user cost or extraction cost of a resource. 8. Productive inputs capable of replacing themselves if harvested at moderate rates are known as:
A) renewable natural resources. 9. Refer to the diagram above, assuming that the firm represented is operating on curve TC0. What is the user cost of extracting a unit of this resource?
D) It cannot be determined with the information given. 10. If a country has a total fertility rate of 1.8, then all else equal we would expect:
B) population in that country to fall over time.

1. 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. Refer to the information above. If the market price of Sockeye Salmon is $15 per ton, what is the minimum amount per ton that Kara would have to offer Kyle to convince him to sell Kara his ITQs?
A) $3.
C) $5.
D) $7. 2. Refer to the diagram above, assuming that the firm represented is operating on curve TC0. How much will the firm extract this year?
C) 1,000. 3. Rapid population growth since 1800 has occurred primarily because of:
B) a significant reduction in death rates as living standards have risen. 4. (Last Word) In 2007, the countries with the highest scores on the Environmental Performance Index were:
B) Switzerland and Sweden. 5. Under a TAC system, fishing of a particular fishery is halted after:
B) a predetermined amount of fish has been caught. 6. Total Allowable Catch (TAC):
C) explicitly limits the number or tonnage of fish that can be harvested from a particular fishery. 7. Which of the following is considered a renewable natural resource?
C) Solar power. 8. Which of the following policies has succeeded in reducing fishery catch sizes?
C) Limiting catch size (TAC). 9. Productive inputs capable of replacing themselves if harvested at moderate rates are known as:
A) renewable natural resources. 10. Mining of "conflict diamonds" tends to:
D) occur at a pace faster than would maximize the long-term stream of profits since warring factions extract diamonds as quickly as possible due to fears that they may soon lose control of the diamond mines. 1. A fishery is typically identified by:
B) location and species. 2. Resource demand has grown over time:
C) because of both increased population and greater consumption per person. 3. Extraction costs of a non-renewable 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.
D) cost of removal from the ground plus replanting costs. 4. A total fertility rate of 1.0 will cause the:
D) next generation to be half the size of the current generation. 5. The amount of land covered by forests is:
C) increasing in places like the U.S. and Western Europe, while declining in countries in South and Central America. 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. Refer to the information above. If the market price of Pacific Halibut is $40 per ton, what is the maximum amount Melanie would be willing to pay per ton for Oli's ITQs?
A) $20.
C) $40.
D) $12. 7. Refer to the diagram above, representing Slippery Slope Oil Company. How many million barrels should Slippery Slope extract and sell this year?
A) 5.
B) 10.
D) It cannot be determined with the information given. 8. (Last Word) Most economists view economic growth as:
A) good for the environment because richer economies spend more on environmental protection.
B) bad for the environment because richer economies extract resources at a faster rate.
D) bad for the environment because people in richer economies tend to care less about the environment. 9. Which of the following is considered a non-renewable natural resource?
B) Coal. 10. Which of the following would cause the present optimal extraction level of a non-renewable resource to rise?
A) A decrease in the price of the resource.
C) A decrease in the user cost of the resource.
D) A decrease in interest rates. 1. Individual Transferable Quotas are limited in their effectiveness because:
A) they are only enforceable within 200 miles of a nation's shores.
B) government, rather than the market, sets their price.
D) they are not tradable. 2. Which of the following is the best example of a fishery?
B) Pacific Halibut. 3. (Consider This) Dozens of companies that convert corn sugars into ethanol:
A) went bankrupt in 2008 and 2009 despite receiving $50 per barrel government subsidies to product ethanol. 4. Productive inputs that are actually or virtually fixed in supply are known as:
B) natural capital.
C) non-renewable natural resources.
D) alternative fuels. 5. When the benefits of conservation and future use are excluded from a cost-benefit analysis, there is a tendency to:
A) more efficiently allocate resources.
B) overvalue future resources by considering them "priceless."
D) extract and use resources as quickly as possible. 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. Refer to the information above and 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, their combined profit would be:
B) $32,000.
C) $40,000.
D) $54,000. 7. A fishery collapse:
C) occurs when harvesting outpaces reproduction for an extended period. 8. The optimal extraction level in the present for a non-renewable resource is:
A) zero.
C) where the market price of the resource equals the extraction cost of the last unit plus the user cost of the last unit.
D) where the extraction cost of the last unit equals the user cost of the last unit. 9. Population will necessarily fall if the:
B) replacement rate exceeds the birthrate. 10. The amount of land covered by forests is:
C) increasing in places like the U.S. and Western Europe, while declining in countries in South and Central America. 1. In countries like Botswana and Zimbabwe, local villages have been given property rights over local elephants with the result that elephant populations:
A) have been decimated as villagers try to maximize short-run profit.
B) have grown as villagers have protected the elephants to support their tourist industry.
C) have grown exponentially, with adverse environmental impacts. 2. A profit-maximizing company should extract a non-renewable resource in the present up to the quantity where the:
A) selling price of the resource equals the extraction cost plus the user cost of the resource. 3. A fishery collapse:
B) necessarily happens when reproduction rates fall.
C) occurs when harvesting outpaces reproduction for an extended period.
D) is irreversible. 4. The optimal extraction level in the present for a non-renewable resource is:
A) zero.
B) where the market price of the resource equals the extraction cost of the last unit.
C) where the market price of the resource equals the extraction cost of the last unit plus the user cost of the last unit. 5. Population will necessarily fall if the:
B) replacement rate exceeds the birthrate. 6. Which of the following policies has succeeded in reducing fishery catch sizes?
A) Limiting the length of the catch season.
B) Limiting the number of boats allowed in a given area.
C) Limiting catch size (TAC). 7. The total fertility rate necessary to keep the population constant is approximately equal to:
C) 2.1. 8. What is the relationship between living standards and birthrates?
B) They are unrelated.
C) The relationship is positive (directly related).
D) The relationship is negative (inversely related). 9. Productive inputs capable of replacing themselves if harvested at moderate rates are known as:
A) renewable natural resources. 10. A rising standard of living will:
C) reduce the birthrate, but population may continue to grow if the death rate falls more quickly.
1. Mining of "conflict diamonds" tends to:
B) occur at a slower pace than would maximize the long-term stream of profits because war increases extraction costs.
C) occur at a pace slower than would maximize the long-term stream of profits since the war disrupts production.
D) occur at a pace faster than would maximize the long-term stream of profits since warring factions extract diamonds as quickly as possible due to fears that they may soon lose control of the diamond mines. 2. What is the relationship between living standards and birthrates?
B) They are unrelated.
C) The relationship is positive (directly related).
D) The relationship is negative (inversely related). 3. (Consider This) Dozens of companies that convert corn sugars into ethanol:
A) went bankrupt in 2008 and 2009 despite receiving $50 per barrel government subsidies to product ethanol.
C) have achieved sufficient economies of scale in production to compete directly on the basis of price with conventional gasoline.
D) were closed down by the government for taking large quantities of corn out of the food market. 4. Over the past two decades, total and per capita water use in the United States have:
A) both increased.
B) leveled off and fallen, respectively.
D) increased and fallen, respectively. 5. Which of the following best describes the typical growth pattern of trees for logging?
D) Trees grow slowly at first, quickly in the middle years, and then at a diminishing rate into old age. 6. Refer to the diagram above, representing Slippery Slope Oil Company. A $5 decrease in the user cost would:
B) increase the optimal quantity extracted in the present. 7. 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. Refer to the information above. If the market price of Sockeye Salmon is $15 per ton, what is the minimum amount per ton that Kara would have to offer Kyle to convince him to sell Kara his ITQs?
A) $3.
B) $4.
D) $7. 8. Resource demand has grown over time:
C) because of both increased population and greater consumption per person. 9. Extraction costs of a non-renewable 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.
D) cost of removal from the ground plus replanting costs. 10. Which of the following nations has a total fertility rate that would suggest that its next generation will only be half the size of the current generation?
A) Hong Kong.
B) Australia.
C) Sweden. 1. According to the concept of present value, a $50 barrel of oil today is worth:
A) less than a $50 barrel in 2 years.
B) more than a $50 barrel in 2 years.
C) the same as a $50 barrel in 2 years. 2. What is the relationship between living standards and birthrates?
D) The relationship is negative (inversely related). 3. Other things equal, extracting oil from shale becomes economically viable (as or less costly than using conventionally extracted oil) when oil prices reach _____ or more per barrel.
C) $50 4. The table below shows the quantity of gold bars (Qb) in thousands, the extraction cost for each thousand bars (in millions of dollars), and user cost of each thousand bars (in millions of dollars) facing the OZ Mining Company this year.
Refer to the data above. 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?
A) 1.
B) 2.
D) 4. 5. The user cost of extracting a non-renewable resource is:
A) the sum of the dollar expenditures incurred to extract the resource.
B) the cost of not being able to extract it in the future if it is extracted and sold in the present.
D) directly proportional to how much of the non-renewable resource remains. 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.
Refer to the information above and 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, their combined profit would be:
A) $28,000.
C) $40,000.
D) $54,000. 7. Individual Transferable Quotas are limited in their effectiveness because:
A) they are only enforceable within 200 miles of a nation's shores.
C) they encourage wasteful spending by fishers in ITQ areas.
D) they are not tradable. 8. In fisheries management, ITQ stands for:
B) Individual Transferable Quota. 9. Refer to the diagram above, assuming that the firm represented is operating on curve TC0. How much will the firm extract this year?
C) 1,000. 10. Under a TAC system, fishing of a particular fishery is halted after:
B) a predetermined amount of fish has been caught.