CU-Boulder ECON 4535 - Exam 1 (6 pages)

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Exam 1



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Exam 1

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Pages:
6
School:
University of Colorado at Boulder
Course:
Econ 4535 - Natural Resource Economics

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Natural Resource Economics Econ 4535 University of Colorado at Boulder Fall 2006 Exam 1 Answer all 30 questions each of equal weight 1 What concerns economists may have with utilization of natural resources a Possible irreversible damages to resources b Possible inefficient utilization c Potential adverse impact on welfare of future generations d All of the above 2 What distinguishes a dynamic or inter temporal allocation problem from a static or single period allocation problem a The rule of economizing behavior does not apply to dynamic problems b Dynamic problems consider effect of current extraction on future extraction possibilities c Dynamic problems give relatively more weight to future benefits d Both a and b above are correct 3 What is not true of the anthropocentric economics view of natural resources a Natural resources are sources of raw materials and amenities b Natural resources are instruments to satisfy human preferences c Value of natural resources is independent of human preferences d All of the above statements are not true of the economics approach 4 What is correct about economic rent or scarcity rent a Economic rent is the scarcity value of a resource that is available in fixed supply b An increase in economic rent of a resource cannot lead to an increase of its quantity supplied c Economic rent of a resource rises as the demand for resource rises d All of the above statements are correct 5 People are said to have a positive rate of time preference for present If so why is it not then efficient to extract the entire reserve of an exhaustible resource now a It would always be efficient to extract the entire reserve now b Excessive extraction now would depress its marginal value below the potential future marginal value resulting from increased future scarcity c It would always be efficient to extract equal quantities each year d None of the above is a satisfactory explanation 6 Assume that there is a positive rate of time preference and that



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