Midterm 03 Solution - 1 - ECON/FRE 374: Land and Resource...

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ECON/FRE 374: Land and Resource Economics First Midterm, May 16, 2003. Total Points: 100 Student Name:______________________________ Student Number____________________ This is Exam Version: A (total pages for this exam version: 8) You have 60 minutes to complete your exam so please budget your time accordingly. Please read all questions carefully. Answer each question in the space provided after the question. You can use the blank side of each sheet if you need extra space for an answer, or for rough work. Please point clearly to any answer written on a blank sheet. This will ensure that your grader does not miss the answer. Section 1: Multiple Choice Questions . Each question worth 3 points, total points: 45 1) An example of a non-use value for a natural resource is a. Discounted value b. Extractive value c. Bequest value d. None of the above Answer:__ c ________________________________ 2) By definition the natural increase in stock of a non-renewable resource a. is negative b. is zero c. is positive d. is none of the above Answer:___ b ________________________________ 3) By definition the current use of an non-accumulative resource a. Involves positive user costs b. Involves zero user costs c. Involves negative user costs d. None of the above Answer:____ b _______________________________
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Midterm Exam FRE 374 Set A 2 2 4) Assume external benefits exist. In this case, when compared to the social optimal the market quantity and price generated are a. Quantity too high, price too high b. Quantity too low, price too low c. Quantity too high, price too low d. Quantity too low, price too high Answer:____ b _______________________________ 5) Assume external costs exist. In this case, when compared to the social optimal the market quantity and price generated are a. Quantity too high, price too high b. Quantity too low, price too low c. Quantity too high, price too low d. Quantity too low, price too high Answer:_____ c ______________________________ 6) The market use of a natural resource is not socially efficient if a. Externalities exist b. Public policy is perfectly designed and enforced c. Property rights are perfectly defined and enforced d. None of the above Answer:_____ a _____________________________ 7) A positive per unit output tax can be illustrated as a. Shifting the marginal cost curve downwards b. Shifting the marginal cost upwards c. Making the marginal cost curve flatter d. All of the above Answer:_____ b _____________________________
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Midterm Exam FRE 374 Set A 3 3 8) The standard marginal willingness to pay curve a. Slopes downward as quantity increases b. Slopes upwards as quantity increases c. Is the same as the Total Benefits curve d. None of the above Answer:____ a ______________________________ 9) Assume that property rights are well defined and perfectly enforced. Further assume that transaction costs for all interested party negotiations are zero. Compared to the social optimum the resource is a. Overexploited if
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Midterm 03 Solution - 1 - ECON/FRE 374: Land and Resource...

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