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Natural Resource Economics
Natural Resource Economics
Natural Resource Economics
17. In a privately managed fishery, the owner manages the business for maximum profit.
When managed in this fashion, the rent of fish stock in the fishery will be
a. maximum.
b. less than maximum, but not zero.
c. zero.
d. negative.
18. On the other hand, when a fishery is open-access, the rent of fish stock in the fishery
is expected to be
a. maximum.
b. less than maximum, but not zero.
c. zero.
d. negative.
19. Which is a common theme discussed in readings: Conservation through Commerce
and Bye, Bye, Bison?
a. They both discuss the effect of environmental pollution on extinction of species.
b. They both discuss the endangerment of survival animal species when they have
open access and when the marginal cost of hunting these animals is very low.
c. They both discuss the importance of maximum sustainable yield of fishery and
animal species.
d. They both discuss the historical trend of prices of renewable resources to infer the
general trend of their scarcity.
20. Maximum sustainable yield (MSY) in a fishery is
a. the efficient rate of catch of fish that maximizes the rent of fish stock.
b. the efficient rate of catch of fish that maximizes the amount of sustainable catch.
c. the maximum rate of catch of fish that is sustainable, but not necessarily efficient.
d. the maximum rate of catch of fish that is sustainable and yields maximum profit.
21. According to the economic model of fishery, the efficient level of fishing effort is
where
a. the marginal revenue from effort is equal to the marginal cost of effort.
b. the total revenue from effort is equal to the total cost of effort.
c. the total cost of effort is equal to zero.
d. the total revenue from effort is equal to zero.
22. According to the economic model of fishery, what is the condition of extinction of a
fish or animal species?
a. When marginal revenue of effort is equal to marginal cost of effort on fishing.
b. When marginal cost of effort on fishing or hunting is substantially high.
c. When a fishery is privately and efficiently managed.
d. When fishery or animal species is open access and the marginal cost of fishing or
hunting is very low, almost zero.
23. When is maximum sustainable yield (MSY) of fishery socially efficient?
a. When marginal cost of fishing effort is positive.
b. When marginal cost of fishing effort is zero.
c. When marginal cost of fishing effort is negative.
d. When marginal cost of fishing effort initially increases and then decreases.
24. Which indicator of economic scarcity does not have foresight (is not affected by
anticipated future scarcity and/or anticipated technological changes)?
a. competitive market price of extracted resource commodities
b. competitive rent or price of in-situ resources
c. the marginal cost of extraction of a resource
d. All of the above indicators have no foresight.
25. In her work on trend of prices of 11 minerals and fuels, Slade (1982) found that the
general time trend of prices of natural resource commodities was
a. U-shaped; prices initially decreased but later increased.
b. linearly increasing.
c. linearly decreasing.
d. indeterminate.
26. Which is the sustainability principle propounded by John Rawls?
a. An obligation to leave the world as we found it in detail
b. An obligation to leave to the future the nondeclining value of capital
c. An obligation to leave to the future the nondeclining value of natural capital
d. An obligation to leave to the future adequate amount of natural capital so that, at
the minimum, future generations would be no worse off than current generation
27. Solow's sustainability rule of leaving to the future nondeclining value of capital
requires/mandates
a. the current generation to reduce their rate utilization of natural resources.
b. the current generation to save and invest sufficiently to compensate for any loss of
natural and manmade capital.
c. preservation or nonuse of natural resources.
d. safe minimum standards of use of natural resources.
28. What is considered a depreciation of natural capital?
a. physical (quantitative) depletion of reserves of natural resources
b. degradation of quality of environmental resources
c. Both a and b
d. None of the above
29. The strong sustainability rule used by Pearce and Atkinson in their paper
"Measuring Sustainable Development" is an empirical method of ascertaining
whether countries are following a path of
a. non-declining value of total manmade and natural capital.
b. non-declining value of natural capital.
c. non-declining flow of essential physical services of critical natural resources.
d. None of the above.
30. Which argument Krutilla (1967) forwarded in his paper Conservation Reconsidered
to urge economists to reconsider conservation of natural resources/inputs?
a. The argument that the value of natural amenities is rising over time, as people are
learning their value from actually using them and experiencing their pleasures.
b. The argument that technological progress may not mitigate scarcity of rare and
unspoiled natural phenomena or resources.
c. The argument that even production of fabricated goods ultimately requires some
natural input.
e. All of the above were the arguments presented in Krutillas paper.
Answers
1a, 2a, 3b, 4d, 5a, 6a, 7b, 8c, 9c, 10a, 11b, 12a, 13b, 14a, 15a, 16d, 17a, 18c, 19b, 20c,
21a, 22d, 23b, 24c, 25a, 26d, 27b, 28c, 29b, 30d