Question 1

Use the following to answer question(s): Future Generations and Exhaustible Natural Resources
 
-(Exhibit: Future Generations and Exhaustible Natural Resources) S₁ is the current supply curve of an exhaustible resource.All other things unchanged, it is the current ________ of extracting the resource.

Accepted Answer

The current supply curve S₁ represents the marginal cost (MC) of extracting the exhaustible resource at the current level of technology and market conditions. It shows the additional cost of producing one more unit of the resource, which increases as the quantity produced increases due to diminishing returns and increasing scarcity. The other options (A) MR, (B) MP, and (D) MRP are not directly related to the supply curve of an exhaustible resource and may not reflect the true costs and benefits of extraction over time. MR (marginal revenue) is the additional revenue from selling one more unit of output, which depends on the market price and demand elasticity. MP (marginal product) is the additional output from using one more unit of input, which depends on the technology and input prices. MRP (marginal revenue product) is the additional revenue from using one more unit of input, which depends on both the product price and the marginal product of the input.

Question 2

Use the following to answer question(s): Future Generations and Exhaustible Natural Resources
 
-(Exhibit: Future Generations and Exhaustible Natural Resources) The demand curve (D) for an exhaustible resource is also the _______ curve.S₃

Accepted Answer

The demand curve (D) for an exhaustible resource is also the Marginal Revenue Product (MRP) curve. MRP represents the additional revenue generated by the last unit of the resource employed in production. When the market demand for the resource increases, the demand curve (D) and the MRP curve both shift upward.

Question 3

An increase in the value that future consumers are expected to place on an exhaustible resource ________ the marginal cost of extraction and ________ the current price of the resource.

Accepted Answer

An increase in the expected future value of an exhaustible resource leads to a decrease in current supply as suppliers withhold the resource in anticipation of higher future prices, which increases the marginal cost of extraction and raises the current price.

Question 4

A resource for which consumption of its services necessarily reduces the stock of the resource is a(n):

Accepted Answer

An exhaustible natural resource is a resource that can be depleted over time as its consumption necessarily reduces its stock. Examples include fossil fuels like coal and oil. On the other hand, renewable natural resources like solar, wind, and tidal energy do not necessarily reduce in stock as their services are consumed. Independent and unknown resources are too vague to give a definite answer.

Question 5

The Case in Point on A Social Program in Which Everybody Wins compares the:

Accepted Answer

The article discusses the benefits of an intensive preschool program and compares the net present value to both the individual and society as a whole. It does not discuss private vs public schools, social workers vs prison guards, or increased staffing of social workers and counselors in high schools.

Question 6

The owner of an exhaustible resource should ________ current extraction rate if the expected price increase of the resource is ________ the interest rate.

Accepted Answer

The owner should decrease the current extraction rate if the expected price increase is greater than the interest rate, as it would be more profitable to sell the resource in the future when prices are higher.

Question 7

A decrease in the demand for capital will lead to a(n) _______ in the demand for loanable funds and a(n) _______ in the interest rate.

Accepted Answer

A decrease in the demand for capital leads to a decrease in the demand for loanable funds, as businesses and individuals are less inclined to borrow money for investment purposes. This reduced demand for loanable funds, in turn, leads to a decrease in the interest rate, as lenders lower rates to attract borrowers.

Question 8

A decrease in the interest rate, all other things unchanged, ________ the supply of an exhaustible natural resource and ________ the current price of the resource.

Accepted Answer

A decrease in the interest rate may lead to a decrease in the cost of borrowing, which could encourage producers to invest in the exploration and extraction of exhaustible natural resources. This increase in the supply of the natural resource would result in a shift to the right in the supply curve, leading to a decrease in the current price of the resource. Therefore, the correct answer is C, which states that a decrease in the interest rate decreases the supply of an exhaustible natural resource and increases the current price of the resource.

Question 9

Changes in the ________ for (of) capital affect the ________ market and changes in the ________ affect ________ capital.

Accepted Answer

Changes in the demand for capital affect the loanable funds market, and changes in the loanable funds affect the quantity demanded of capital. This reflects how the demand for capital (to invest in business activities, for example) influences the market for loanable funds (where savings and investments meet), and how changes in the availability or interest rates of those funds affect how much capital businesses will demand.

Question 10

Use the following to answer question(s): Future Generations and Exhaustible Natural Resources
 
-(Exhibit: Future Generations and Exhaustible Natural Resources) If S₁ is the current supply curve, the efficient price is _______ and the efficient consumption level is _______ .

Accepted Answer

The efficient price and consumption level are determined where the current supply curve (S₁) intersects the demand curve, which is at point P₁ and Q₁, respectively. This intersection point reflects the equilibrium price and quantity that balance current supply with demand, ensuring efficient allocation of resources.

Question 11

The owner of an exhaustible resource should ________ current extraction if the expected percentage price increase of the resource is ________ the interest rate.

Accepted Answer

The correct answer is B because the owner of an exhaustible resource should increase current extraction if the expected percentage price increase of the resource is less than the interest rate. This is because the owner can earn a higher return by extracting and selling the resource now than by waiting for the price to increase.

Question 12

Which of the following is (are) true?

Accepted Answer

A renewable natural resource is one that can be replenished over time, such as wind or solar power. An exhaustible natural resource is one that is finite and will eventually run out, such as oil or coal. These resources are often managed in a manner that makes some of it available for future use through conservation and sustainable practices. Therefore, statement A is false and statement C is also false.

Question 13

Use the following to answer question(s): Future Generations and Exhaustible Natural Resources
 
-(Exhibit: Future Generations and Exhaustible Natural Resources) S₁ considers and reflects:

Accepted Answer

S₁ considers and reflects on all of the above factors, including the prevailing interest rate, expectations of future demand for the resource, and the current marginal cost of extracting the resource. Taking all of these factors into account allows for a more comprehensive assessment of the potential impact on future generations when using exhaustible natural resources.

Question 14

An increase in the supply of loanable funds will lead to a(n) _______ in the interest rate and a(n) _______ in the quantity of capital demanded.

Accepted Answer

An increase in the supply of loanable funds will lead to a decrease in the interest rate, as lenders will compete with one another to attract borrowers. This decrease in the interest rate will then lead to an increase in the quantity of capital demanded, as firms will be more willing to borrow funds at the lower interest rate. Therefore, the correct choice is (C), decrease in the interest rate and increase in the quantity of capital demanded.

Question 15

If the interest rate rises, the owners of oil will supply ________ oil today and conserve ________ for the future.

Accepted Answer

When interest rates rise, the opportunity cost of holding oil increases, prompting owners to supply more oil today and conserve less for the future.

Question 16

If owners of oil expect lower prices in the future, they will supply ________ oil today and ________ for future use.

Accepted Answer

If owners of oil expect lower prices in the future, they will supply more oil today to take advantage of the current higher prices and conserve less for future use, anticipating lower profitability.

Question 17

A decrease in the supply of loanable funds will lead to a(n) ________ in the interest rate and a(n) ________ in the quantity of capital demanded.

Accepted Answer

A decrease in the supply of loanable funds leads to an increase in the interest rate due to higher costs of borrowing. This, in turn, results in a decrease in the quantity of capital demanded, as higher interest rates make borrowing more expensive and thus reduce the demand for capital.

Question 18

According to the Case in Point on A Social Program in Which Everybody Wins, the net present value of the intensive High/Scope Perry Preschool Program:

Accepted Answer

The net present value of the intensive High/Scope Perry Preschool Program was positive for males whether assuming an interest rate of 3% or 7%, indicating the program's economic benefits outweighed its costs under both interest rate scenarios.

Question 19

Choices in the allocation of natural resources:

Accepted Answer

The allocation of natural resources can have long-term effects on the environment and future generations. Therefore, it is important to make responsible and sustainable choices in their allocation. Choices regarding labor and capital may also have long-term effects, but they are not directly tied to the preservation of natural resources. Short-term effects may occur with any allocation decision, but the focus should be on the long-term implications.

Question 20

A resource whose services can be consumed without reducing the stock of the resource is a(n):

Accepted Answer

Renewable natural resources, such as solar power, wind power, and hydropower can be consumed without reducing the stock of the resource. Therefore, they are sustainable and can be replenished over time.

Quiz 13: Interest Rates and the Markets for Capital and Natural Resources

Use the following to answer question(s) : Future Generations and Exhaustible Natural Resources -(Exhibit: Future Generations and Exhaustible Natural Resources) The demand curve (D) for an exhaustible resource is also the _______ curve.S₃

An increase in the value that future consumers are expected to place on an exhaustible resource the marginal cost of extraction and the current price of the resource.

A resource for which consumption of its services necessarily reduces the stock of the resource is a(n) :

The Case in Point on A Social Program in Which Everybody Wins compares the:

The owner of an exhaustible resource should current extraction rate if the expected price increase of the resource is the interest rate.

A decrease in the demand for capital will lead to a(n) _ in the demand for loanable funds and a(n) _ in the interest rate.

A decrease in the interest rate, all other things unchanged, the supply of an exhaustible natural resource and the current price of the resource.

Changes in the for (of) capital affect the market and changes in the affect capital.

Use the following to answer question(s) : Future Generations and Exhaustible Natural Resources -(Exhibit: Future Generations and Exhaustible Natural Resources) If S₁ is the current supply curve, the efficient price is _ and the efficient consumption level is _ .

The owner of an exhaustible resource should current extraction if the expected percentage price increase of the resource is the interest rate.

Which of the following is (are) true?

Use the following to answer question(s) : Future Generations and Exhaustible Natural Resources -(Exhibit: Future Generations and Exhaustible Natural Resources) S₁ considers and reflects:

An increase in the supply of loanable funds will lead to a(n) _ in the interest rate and a(n) _ in the quantity of capital demanded.

If the interest rate rises, the owners of oil will supply oil today and conserve for the future.

If owners of oil expect lower prices in the future, they will supply oil today and for future use.

A decrease in the supply of loanable funds will lead to a(n) in the interest rate and a(n) in the quantity of capital demanded.

According to the Case in Point on A Social Program in Which Everybody Wins, the net present value of the intensive High/Scope Perry Preschool Program:

Choices in the allocation of natural resources:

A resource whose services can be consumed without reducing the stock of the resource is a(n) :

Quiz 13: Interest Rates and the Markets for Capital and Natural Resources

Use the following to answer question(s) : Future Generations and Exhaustible Natural Resources -(Exhibit: Future Generations and Exhaustible Natural Resources) The demand curve (D) for an exhaustible resource is also the _______ curve.S₃

An increase in the value that future consumers are expected to place on an exhaustible resource ________ the marginal cost of extraction and ________ the current price of the resource.

A resource for which consumption of its services necessarily reduces the stock of the resource is a(n) :

The Case in Point on A Social Program in Which Everybody Wins compares the:

The owner of an exhaustible resource should ________ current extraction rate if the expected price increase of the resource is ________ the interest rate.

A decrease in the demand for capital will lead to a(n) _______ in the demand for loanable funds and a(n) _______ in the interest rate.

A decrease in the interest rate, all other things unchanged, ________ the supply of an exhaustible natural resource and ________ the current price of the resource.

Changes in the ________ for (of) capital affect the ________ market and changes in the ________ affect ________ capital.

Use the following to answer question(s) : Future Generations and Exhaustible Natural Resources -(Exhibit: Future Generations and Exhaustible Natural Resources) If S₁ is the current supply curve, the efficient price is _______ and the efficient consumption level is _______ .

The owner of an exhaustible resource should ________ current extraction if the expected percentage price increase of the resource is ________ the interest rate.

Which of the following is (are) true?

Use the following to answer question(s) : Future Generations and Exhaustible Natural Resources -(Exhibit: Future Generations and Exhaustible Natural Resources) S₁ considers and reflects:

An increase in the supply of loanable funds will lead to a(n) _______ in the interest rate and a(n) _______ in the quantity of capital demanded.

If the interest rate rises, the owners of oil will supply ________ oil today and conserve ________ for the future.

If owners of oil expect lower prices in the future, they will supply ________ oil today and ________ for future use.

A decrease in the supply of loanable funds will lead to a(n) ________ in the interest rate and a(n) ________ in the quantity of capital demanded.

According to the Case in Point on A Social Program in Which Everybody Wins, the net present value of the intensive High/Scope Perry Preschool Program:

Choices in the allocation of natural resources:

A resource whose services can be consumed without reducing the stock of the resource is a(n) :

An increase in the value that future consumers are expected to place on an exhaustible resource the marginal cost of extraction and the current price of the resource.

The owner of an exhaustible resource should current extraction rate if the expected price increase of the resource is the interest rate.

A decrease in the demand for capital will lead to a(n) _ in the demand for loanable funds and a(n) _ in the interest rate.

A decrease in the interest rate, all other things unchanged, the supply of an exhaustible natural resource and the current price of the resource.

Changes in the for (of) capital affect the market and changes in the affect capital.

Use the following to answer question(s) : Future Generations and Exhaustible Natural Resources -(Exhibit: Future Generations and Exhaustible Natural Resources) If S₁ is the current supply curve, the efficient price is _ and the efficient consumption level is _ .

The owner of an exhaustible resource should current extraction if the expected percentage price increase of the resource is the interest rate.

An increase in the supply of loanable funds will lead to a(n) _ in the interest rate and a(n) _ in the quantity of capital demanded.

If the interest rate rises, the owners of oil will supply oil today and conserve for the future.

If owners of oil expect lower prices in the future, they will supply oil today and for future use.

A decrease in the supply of loanable funds will lead to a(n) in the interest rate and a(n) in the quantity of capital demanded.