Question 1

The amount of a resource consumed depends on
A)the price of the resource.
B)consumer income.
C)the price of substitute resources.
D)all of the above.

Accepted Answer

The amount of a resource consumed depends on all of the factors listed in choices A, B, and C. The price of the resource will determine how much of it consumers are willing and able to buy, while consumer income will affect their purchasing power. Additionally, if there are substitute resources available at lower prices, consumers may choose to switch to those instead, affecting the amount of the original resource consumed. Therefore, all of these factors need to be taken into consideration when predicting or analyzing resource consumption.

Question 2

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

Accepted Answer

The structure of incentives accompanying the price increase helps to encourage conservation and alternative resource development, making depletion less likely. Additionally, these incentives can stimulate innovation and investment in new technologies that can lead to a reversal of the price increase in the future. Government programs, foreign competition, and taxation can also play a role in resource depletion, but they are not as directly related to the structure accompanying the price increase.

Question 3

Empirical evidence suggests that the relative scarcity of most resources is
A)declining.
B)increasing slowly.
C)increasing rapidly.
D)largely unchanged.

Accepted Answer

The answer of Empirical evidence suggests that the relative scarcity...

Question 4

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

Accepted Answer

Proved reserves are estimates of the amount of a resource that can be recovered with current technology and at current prices. However, with technological advancements and changes in prices, it is likely that more of the resource can be recovered in the future. Therefore, proved reserves may underestimate the total quantity of the resource in the ground.

Question 5

Predictions that natural resources such as oil will be essentially used up in the next few decades have
A)been frequently made for the past century, but have always proven to be false.
B)usually been based on the quantity of proved reserves.
C)ignored the role of price in governing the quantities demanded and supplied.
D)All of the above.

Accepted Answer

All of the statements are true. The prediction that natural resources like oil will soon be exhausted are not new and have been made for over a century. However, this has always proven to be false as new reserves are discovered and technologies are developed to extract previously inaccessible resources. These predictions are usually based on the quantity of proved reserves, without taking into account the exploration of new reserves. Additionally, the role of price in determining supply and demand is often ignored, which can lead to changes in behaviour that affect the pace of resource depletion.

Question 6

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

Accepted Answer

Human responses to relative price changes play a significant role in resource depletion predictions. As the prices of scarce resources increase, consumers and producers find ways to conserve, innovate, and substitute those resources, leading to a reduction in demand and ultimately lowering the rate of depletion predicted. Therefore, predictions of resource depletion often ignore the adaptive capacity of humans to adjust their behavior in response to rising prices.

Question 7

Water supply problems are generally the result of
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.

Accepted Answer

Missing or incomplete markets for water can lead to issues with water supply due to lack of incentives for conservation and efficient use of water resources. Too much trading of water can also worsen the problem by encouraging water transfer to areas where it may not be sustainable in the long run. Government subsidies to desalination may help alleviate water supply problems in certain areas, but it is not a comprehensive solution to address the underlying market failures related to water management.

Question 8

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

Accepted Answer

Technological advances in agriculture have allowed for more efficient use of land, leading to less deforestation for agricultural purposes. For example, the use of chemical fertilizers enables crops to grow more quickly and in smaller spaces, reducing the need to clear large areas of forest for agriculture. Additionally, advances in harvesting equipment can minimize damage to forests during logging activities.

Question 9

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

Accepted Answer

Proved reserves refer to the amount of a resource that can be produced at current levels of expected prices and technology. This means that it takes into account both the availability of the resource and the economic viability of extracting it. The other options - (A) in one year's time, (B) in the next 10 years, and (C) before it runs out - do not capture the same level of economic considerations that are involved in defining proved reserves.

Question 10

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
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.

Accepted Answer

If the market price is unregulated and there is a sudden decrease in proved reserves of titanium, the price will increase due to supply and demand dynamics. This increase in price will incentivize exploration and the use of more effective recovery methods to tap into more reserves of titanium. Additionally, the higher price will encourage consumers and manufacturers to conserve their use of titanium. Finally, the high price of titanium will increase the incentive to find and use substitutes, leading to a potential future decrease in demand for titanium. Thus, all three options (A, B, and C) are likely to occur in an unregulated market with unexpectedly low levels of proved reserves.

Question 11

The overall trend in resource prices has been
A)upward.
B)downward.
C)constant.
D)increasing exponentially.

Accepted Answer

The answer of The overall trend in resource prices has...

Question 12

What happens to a resource as it becomes scarcer?
A)The price rises and this increases the future supply relative to demand.
B)The price rises and this increases the future demand relative to supply.
C)The price falls and this increases the future supply relative to demand.
D)The price falls and this increases the future demand relative to supply.

Accepted Answer

As a resource becomes scarcer, the supply decreases relative to demand. This creates a situation where the price of the resource increases, as there are more buyers than there are sellers. This increase in price incentivizes producers to increase production, as it becomes more profitable to do so. This increase in production leads to a larger future supply relative to demand. Therefore, choice A is the best answer.

Question 13

Resources that are not created or renewed at a significant rate, and therefore could potentially be used up over time, are called
A)renewable resources.
B)nonrenewable resources.
C)fixed resources.
D)earthly geographic resources.

Accepted Answer

Nonrenewable resources are limited in quantity and cannot be replenished within a meaningful timescale, which means they could potentially be depleted if not used responsibly. Renewable resources, on the other hand, can be replenished quickly enough to be considered sustainable over time. Fixed resources and earthly geographic resources are not commonly used terms in environmental science and do not accurately reflect the concept of resource availability or sustainability.

Question 14

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

Accepted Answer

While it is true that increased demand from China and India will create scarcity and higher prices, market forces will also encourage the development of new technologies and increased efficiency, which will help to balance supply and demand worldwide. Additionally, shortages will not be limited to North America and Europe, but will likely be felt globally.

Question 15

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

Accepted Answer

The answer of Why do water supply problems exist in...

Question 16

Doomsday projections have generally
A)been correct.
B)been incorrect, but with better technology and the ability to predict the future, these forecasts have become much more accurate in the last few decades.
C)been inconsistent. Some projections came true, others failed.
D)been wrong.

Accepted Answer

Doomsday projections have generally been wrong. While there have been instances of certain projections coming true, the overall trend has been towards false predictions.

Question 17

When natural resources are not traded, or where markets are not allowed to function as well as they can under a system of well-defined property rights, the problems of ____ and ____ are common.
A)higher taxes; increased regulation
B)waste; scarcity
C)inflation; unemployment
D)slow growth; fluctuating currency values

Accepted Answer

When natural resources are not traded or markets are not allowed to function well, the problems of waste (use of resources that are not needed) and scarcity (lack of resources that are needed) are common.

Question 18

An example of a renewable resource is
A)coal.
B)oil.
C)timber.
D)diamonds.

Accepted Answer

Timber is a renewable resource because trees can be replanted and grown again for future use. Coal, oil, and diamonds are all non-renewable resources as they are formed over millions of years and cannot be replenished within a human lifetime.

Question 19

Compared with 1920, the United States today has
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.

Accepted Answer

The answer of Compared with 1920, the United States today...

Question 20

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

Accepted Answer

The answer of How are the economic forces that govern...

Quiz 26: Appendix: the Question of Resource Exhaustion

The amount of a resource consumed depends on

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.

Empirical evidence suggests that the relative scarcity of most resources is

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

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

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

Water supply problems are generally the result of

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

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

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

The overall trend in resource prices has been

What happens to a resource as it becomes scarcer?

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

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

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

Doomsday projections have generally

When natural resources are not traded, or where markets are not allowed to function as well as they can under a system of well-defined property rights, the problems of and are common.

An example of a renewable resource is

Compared with 1920, the United States today has

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