NR 326 Exam Questions with correct
Answer Latest Updated 2025/2026.
Economics - ANS--the study of how people and society chose to employ scarce resources that
could have alternative uses in order to produce various commodities and to distribute them for
consumption, now or in the future, among various persons and groups in society
-the study of choice in an environment of scarcity
Environmental/ Resource Economics - ANS--focuses on maintaining and enhancing human
existence in a world in which scarcity limits the availability of raw material resources and the
capacity of the environment to absorb wastes and provide amenities that uplift human
experience
Resource defined - ANS-Two key dimensions- value and scarcity
Something that is useful and valuable in the condition in which we find it
Always an input to a process, never an output
Value - ANS-Arises from the human utility provided by a resource
Scarcity - ANS-Describes any resource/commodity in which the quantity in demand exceeds
the supply available
Positive prices
Dimensions of resource scarcity - ANS-Not just a quantity concept but includes quality, time,
and space
resource prices of scarce items are not rising. Why? - ANS-Discovery of exhaustible
Poor stewardship of renewables
Loss of habitat for renewables
Classification for natural resources - ANS-1. Exhaustible
2. Biological
3. Flow
4. Fund
Consumer theory - ANS-1. Tastes and preferences
2. Availability and scarcity of resources
3. Technology
, Utility - ANS-Satisfaction people derive from consuming
Diminishing marginal utility - ANS-Additional consumption does not bring as much satisfaction
as before
Indifference curves - ANS-Represent tastes and preferences
Reflect degree of substitution
Convex to origin
Negatively sloped - marginal rate of substitution
Non intersecting
Utility maximization - ANS-Maximize satisfaction within the budget by making efficient decisions
in consuming
Factors that influence demand - ANS-1. Individual tastes and preferences
2. Price of the good
3. Household income
4. Household accumulated wealth
5. Prices of related goods
6. Expectations about future income, wealth and prices
Engle curve - ANS-Quantity demanded in response to an income change
Isoquants - ANS-Lines connecting points of equal TP for the two inputs
Characteristics of isoquants are generally the same as indifference curves
The rate of exchange between the two inputs (K and L) while still producing the same TP is the
marginal rate of technical substitution
isocosts - ANS-Budget for the inputs of production
Price ration of the inputs
Expansion path - ANS-Locus of tangencies
Variable costs - ANS-Costs that arise from and are associated with the factors of production
that vary with output level
Fixed costs - ANS-Costs that are incurred regardless of the level of production even when the
output level is zero
Revenue and profit maximization - ANS-In a competitive market total revenue (TR) = PxQ
Average revenue - ANS-AR = TR/Q
AR= P(PQ/Q) in pure competition
Answer Latest Updated 2025/2026.
Economics - ANS--the study of how people and society chose to employ scarce resources that
could have alternative uses in order to produce various commodities and to distribute them for
consumption, now or in the future, among various persons and groups in society
-the study of choice in an environment of scarcity
Environmental/ Resource Economics - ANS--focuses on maintaining and enhancing human
existence in a world in which scarcity limits the availability of raw material resources and the
capacity of the environment to absorb wastes and provide amenities that uplift human
experience
Resource defined - ANS-Two key dimensions- value and scarcity
Something that is useful and valuable in the condition in which we find it
Always an input to a process, never an output
Value - ANS-Arises from the human utility provided by a resource
Scarcity - ANS-Describes any resource/commodity in which the quantity in demand exceeds
the supply available
Positive prices
Dimensions of resource scarcity - ANS-Not just a quantity concept but includes quality, time,
and space
resource prices of scarce items are not rising. Why? - ANS-Discovery of exhaustible
Poor stewardship of renewables
Loss of habitat for renewables
Classification for natural resources - ANS-1. Exhaustible
2. Biological
3. Flow
4. Fund
Consumer theory - ANS-1. Tastes and preferences
2. Availability and scarcity of resources
3. Technology
, Utility - ANS-Satisfaction people derive from consuming
Diminishing marginal utility - ANS-Additional consumption does not bring as much satisfaction
as before
Indifference curves - ANS-Represent tastes and preferences
Reflect degree of substitution
Convex to origin
Negatively sloped - marginal rate of substitution
Non intersecting
Utility maximization - ANS-Maximize satisfaction within the budget by making efficient decisions
in consuming
Factors that influence demand - ANS-1. Individual tastes and preferences
2. Price of the good
3. Household income
4. Household accumulated wealth
5. Prices of related goods
6. Expectations about future income, wealth and prices
Engle curve - ANS-Quantity demanded in response to an income change
Isoquants - ANS-Lines connecting points of equal TP for the two inputs
Characteristics of isoquants are generally the same as indifference curves
The rate of exchange between the two inputs (K and L) while still producing the same TP is the
marginal rate of technical substitution
isocosts - ANS-Budget for the inputs of production
Price ration of the inputs
Expansion path - ANS-Locus of tangencies
Variable costs - ANS-Costs that arise from and are associated with the factors of production
that vary with output level
Fixed costs - ANS-Costs that are incurred regardless of the level of production even when the
output level is zero
Revenue and profit maximization - ANS-In a competitive market total revenue (TR) = PxQ
Average revenue - ANS-AR = TR/Q
AR= P(PQ/Q) in pure competition
