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275.
The total allowable catch (TAC) system differs from the individual transferable quota
(ITQ) system in that
A. TAC limits the total harvest of fish, while ITQ does not.
276.
Matt fishes for tuna at a cost of $4 per ton. John fishes at a cost of $6 per ton. Each has
a
1,000-ton ITQ
. The current market price is $8 per ton. What
amount could Matt pay John
to induce him to sell his ITQ?
277.
Joe fishes for swordfish at a cost of $6 per ton. Ronny fishes at a cost of $4 per ton.
Both have one
1,000-ton ITQ
, and the current market price is $10 per
ton. If Joe offered to
sell his ITQ to Ronny for $7,000, he and Ronny would
A. make the sale because they're both better off.
278.
Linda fishes for mahi mahi at a cost of $10 per ton, while Tessa fishes at a cost of $8
per ton. Both have one
1,000-ton ITQ
, and the current market price is $13 per ton. If Linda
offered to sell her ITQ to Tessa for $3,000, she and Tessa would
A.
make the sale because they're both better off.
279.
Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton.
Both have one
1,000-ton ITQ
and the current market price is $5 per ton.
If Dave offered to
sell his ITQ to Sue for $2,000, he and Sue would
D.
not make the sale, because neither is better off.
19-116
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic:
Renewable Resources
280.
Donald fishes for swordfish at a cost of $6 per ton. Ronny fishes at a cost of $4 per ton.
Both have one
1,000-ton ITQ
, and the current market price is $10
per ton. If Donald sold
his ITQ to Ronny for $5,000, society would benefit from
A.
more fish being caught.
281.
Linda fishes for mahi mahi at a cost of $10 per ton. Tessa fishes at a cost of $8 per ton.
Both have one
1,000-ton ITQ
and the current market price is $13. If
Linda sold her ITQ to
Tessa for $4,000, society would benefit from
A.
more fish being caught.
282.
Which of the following is not one of the points made in "Tragedy of the Commons"?
A.
Individual property rights play a crucial role in resource preservation.
19-117
283.
As nations become richer, they tend to pollute
D.
more but offer better protection for sensitive ecosystems.
284.
A plot of the Environment Performance Index (EPI) scores for nations on the vertical
axis and corresponding GDP per person on the horizontal axis shows
that as
A. GDP rises, EPI score falls.
True / False Questions
19-118
285.
The era after the Industrial Revolution proved that it was impossible to have improved
standards of living with large population growth.
286.
Malthus's theory states that living standards could only temporarily rise above
subsistence levels.
287.
Malthus argued that any increase in living standards would cause a decrease in
population growth.
288.
If a country's replacement rate is two births per woman and its total fertility rate is four
births per woman, the country's population will decline.
19-119
289.
With modernization, the world's population will continue to decline even as many
countries experience declining death rates.
290.
Low birthrates in industrialized countries are a major concern for governments,
reducing the number of potential soldiers and taxpayers to support social
programs.
291.
One of the world's greatest economic challenges over the coming decades will be to
supply the resources that will be demanded as living standards in
poorer countries rise to
rich-country standards.
19-120
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
TRUE
292.
Petroleum is the largest source of electric energy generated in the U.S.
293.
Because better technology means that more output can be produced with the same
amount of energy input, rising living standards in the future will not
necessarily depend on
using more energy.
294.
Efficient energy usage in electricity generation often involves using a mix of energy
inputs, some of which are much more expensive than others.
19-121
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Accessibility:
Keyboard Navigation
Blooms: Understand
Di f f i culty:
02 Medium
Learning Objective: 19-02 Describe why using a mix of energy sources is efficient, even if
some of them are quite costly.
Test Bank: II
Topic:
Energy Economics
295.
If per-capita energy usage has leveled off while per capita GDP has risen, then it must
mean that each dollar of output produced required a larger amount of
energy.
296.
If the world runs out of oil, it will also run out of energy.
297.
Economists widely fear that the world will run out of energy in the next century.
19-122
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
energy.
Test Bank: II
Topic:
Running Out of Energy?
298.
Recent studies indicate that as the price of a barrel of oil rises to $80, the use of
biodiesel as an alternative fuel becomes economically viable.
299.
As technologies improve, the costs of producing alternatives will likely fall, reducing
the cost of replacing oil.
300.
If the price of oil falls, the economic viability of alternative energy sources also tends
to fall.
19-123
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic:
Running Out of Energy?
301.
Optimal resource allocation involves considering current and future uses, benefits, and
costs.
302.
In the extraction of a nonrenewable resource, increased current extraction will reduce
the extraction firm's user costs.
303.
In the extraction of a nonrenewable resource such as coal, the mining firm faces "user
costs," which refers to the cost of digging out the coal, running the
mine, and transporting
the coal.
304.
If resource extraction companies can benefit from both present and future extraction,
they will limit current extraction to only those units which are more
profitable to extract in
the present rather than in the future.
305.
Definition of property rights is a key component to proper conservation of resources.
306.
In the case of conflict diamonds, the strict enforcement of property rights has led to too
fast of a rate of extraction.
307.
The price of harvesting a renewable resource does not affect when or how much of a
renewable resource will be harvested.
19-125
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Di f f i culty:
02 Medium
Learning Objective: 19-05 Relate how to use property rights to prevent deforestation and
species extinction.
Test Bank: II
Topic:
Renewable Resources
308.
A fishery collapse happens when a fishery's population grows faster than fish can be
harvested.
309.
Encouraging conservation is especially difficult in the open ocean, where it is
impossible to either define or enforce property rights over fish.
310.
One of the worst systems for encouraging conservation of fisheries is the combination
of total allowable catch (TAC) with individual transferable quota
(ITQ).
19-126
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 19-05 Relate how to use property rights to prevent deforestation and
species extinction.
Test Bank: II
Topic:
Renewable Resources
311.
Studies by economists indicate that economic growth and rising living standards are
good for the environment because, as societies get richer, they tend to
spend more on things
that improve environmental quality.
