Chapter 02 – The Economy and the Environment
Chapter 02
The Economy and the Environment
Multiple Choice Questions
1. The trade-off that exists between harvesting as much as possible of a renewable resource
today versus waiting for the future exemplifies the ________ of many natural resource
management issues.
A. sustainability
B. intertemporal dimension
C. short-run impact
D. efficiency
Difficulty: Easy
2. When a new production technology is invented that results in production of smaller
amounts of residuals per unit of output produced, this is called reducing the ________.
A. damages from production
B. intensity of pollution
C. residuals from production
D. residuals intensity of production
Difficulty: Easy
3. The residuals from production can be reduced by ________.
A. shifting the composition of output towards low-residual items
B. preventing pollution by reducing the energy inputs required to produce each unit of output
C. reducing the residuals intensity of production
D. all of the choices are correct
Difficulty: Moderate
2-1
,Chapter 02 – The Economy and the Environment
4. An accidental oil spill is an example of a(n) ________ emission while municipal treated
waste is an example of a(n) ________ emission.
A. continuous; episodic
B. global; local
C. point source; nonpoint source
D. episodic; continuous
Difficulty: Easy
5. The study of nature in its role as a provider of raw materials is called ________.
A. natural resource economics
B. natural economics
C. environmental economics
D. all of the choices are correct
Difficulty: Easy
6. ________ economics is an example of a subdivision of natural resource economics.
A. Agricultural
B. Energy
C. Mineral
D. all of the choices are correct
Difficulty: Moderate
7. Nonrenewable resources are those for which there is no process of ________.
A. substitution
B. replenishment
C. sustainability
D. assimilation
Difficulty: Easy
8. Both renewable and nonrenewable resources have ________ trade-offs.
A. objectivity
B. intertemporal
C. relevance
D. stock
Difficulty: Easy
2-2
,Chapter 02 – The Economy and the Environment
9. One of the theoretical ideas of natural resource economics is that the earth’s ___________
is a natural resource under threat of depletion.
A. sun
B. population
C. sustainability
D. assimilative capacity
Difficulty: Easy
10. Although the dividing line between the two is blurring generally speaking, _______ is
concerned with resource extraction and __________ is concerned with environmental
degradation.
A. production economics; consumption economics
B. environmental economics, natural resource economics
C. natural resource economics; environmental economics
D. consumption economics; production economics
Difficulty: Easy
11. In the figure above, (a) represents ____________.
A. the extraction of resources from nature
B. natural resource economics
C. the consumption of goods and services
D. the role of government
Difficulty: Easy
12. In the long run, residuals discharged by producers plus residuals discharged by consumers
must be equal to the materials and energy extracted from the natural environment. The
fundamental balance equation states that this is also equal to the _________________.
A. output of goods and services minus consumer recyclables
B. output of goods and services plus production residuals minus recyclables
C. output of residuals minus consumer recyclables plus producer surplus
D. benefits plus costs
Difficulty: Moderate
2-3
, Chapter 02 – The Economy and the Environment
13. According to the fundamental balance equation, how can M, raw materials and energy
extracted from the environment, be reduced?
A. Reduce G, the amount of goods produced
B. Reduce Rp, residuals from producers
C. Reduce (Rrp + Rr c), recyclables from both consumers and producers
D. All of the above are a method of reducing M
Difficulty: Moderate
14. In the figure above, the curve in (a) represents ____________.
A. a production possibilities curve
B. a trade-off between the production of market goods and environmental quality
C. combinations of outcomes given a fixed endowment and technology
D. all of the above
Difficulty: Easy
15. In the figure above, (b) represents
A. intertemporal linkage between production decisions today and production ability tomorrow
B. a change in technology allowing for increased production
C. the inevitable consequences of air pollution
D. the role of government
Difficulty: Easy
2-4
Chapter 02
The Economy and the Environment
Multiple Choice Questions
1. The trade-off that exists between harvesting as much as possible of a renewable resource
today versus waiting for the future exemplifies the ________ of many natural resource
management issues.
A. sustainability
B. intertemporal dimension
C. short-run impact
D. efficiency
Difficulty: Easy
2. When a new production technology is invented that results in production of smaller
amounts of residuals per unit of output produced, this is called reducing the ________.
A. damages from production
B. intensity of pollution
C. residuals from production
D. residuals intensity of production
Difficulty: Easy
3. The residuals from production can be reduced by ________.
A. shifting the composition of output towards low-residual items
B. preventing pollution by reducing the energy inputs required to produce each unit of output
C. reducing the residuals intensity of production
D. all of the choices are correct
Difficulty: Moderate
2-1
,Chapter 02 – The Economy and the Environment
4. An accidental oil spill is an example of a(n) ________ emission while municipal treated
waste is an example of a(n) ________ emission.
A. continuous; episodic
B. global; local
C. point source; nonpoint source
D. episodic; continuous
Difficulty: Easy
5. The study of nature in its role as a provider of raw materials is called ________.
A. natural resource economics
B. natural economics
C. environmental economics
D. all of the choices are correct
Difficulty: Easy
6. ________ economics is an example of a subdivision of natural resource economics.
A. Agricultural
B. Energy
C. Mineral
D. all of the choices are correct
Difficulty: Moderate
7. Nonrenewable resources are those for which there is no process of ________.
A. substitution
B. replenishment
C. sustainability
D. assimilation
Difficulty: Easy
8. Both renewable and nonrenewable resources have ________ trade-offs.
A. objectivity
B. intertemporal
C. relevance
D. stock
Difficulty: Easy
2-2
,Chapter 02 – The Economy and the Environment
9. One of the theoretical ideas of natural resource economics is that the earth’s ___________
is a natural resource under threat of depletion.
A. sun
B. population
C. sustainability
D. assimilative capacity
Difficulty: Easy
10. Although the dividing line between the two is blurring generally speaking, _______ is
concerned with resource extraction and __________ is concerned with environmental
degradation.
A. production economics; consumption economics
B. environmental economics, natural resource economics
C. natural resource economics; environmental economics
D. consumption economics; production economics
Difficulty: Easy
11. In the figure above, (a) represents ____________.
A. the extraction of resources from nature
B. natural resource economics
C. the consumption of goods and services
D. the role of government
Difficulty: Easy
12. In the long run, residuals discharged by producers plus residuals discharged by consumers
must be equal to the materials and energy extracted from the natural environment. The
fundamental balance equation states that this is also equal to the _________________.
A. output of goods and services minus consumer recyclables
B. output of goods and services plus production residuals minus recyclables
C. output of residuals minus consumer recyclables plus producer surplus
D. benefits plus costs
Difficulty: Moderate
2-3
, Chapter 02 – The Economy and the Environment
13. According to the fundamental balance equation, how can M, raw materials and energy
extracted from the environment, be reduced?
A. Reduce G, the amount of goods produced
B. Reduce Rp, residuals from producers
C. Reduce (Rrp + Rr c), recyclables from both consumers and producers
D. All of the above are a method of reducing M
Difficulty: Moderate
14. In the figure above, the curve in (a) represents ____________.
A. a production possibilities curve
B. a trade-off between the production of market goods and environmental quality
C. combinations of outcomes given a fixed endowment and technology
D. all of the above
Difficulty: Easy
15. In the figure above, (b) represents
A. intertemporal linkage between production decisions today and production ability tomorrow
B. a change in technology allowing for increased production
C. the inevitable consequences of air pollution
D. the role of government
Difficulty: Easy
2-4
