Question 1

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,300 a ton. Over the same time a measure of the overall price level increased from 168 to 187. The price of iron ore increased by

Accepted Answer

The price of iron ore increased from $1,200 to $1,300, a 8.3% increase. Meanwhile, the overall price level increased from 168 to 187, a 11.3% increase. Therefore, the price of iron ore increased by less than inflation. This also means that the relative scarcity of iron ore decreased, as it became more widely available or there was an increased supply.

Question 2

Which of the following is correct?

Accepted Answer

A) Once adjustment is made for inflation, the prices of most natural resources have been about steady or falling. This statement is correct as technological advancements have reduced the cost of resource extraction and increased resource availability, leading to stable or declining prices.

B) Technological progress has allowed us to substitute renewable resources for some nonrenewable resources. This statement is also correct as innovations in renewable energy, such as solar and wind power, have provided alternatives to fossil fuels.

C) Technological progress has made once-crucial natural resources less necessary. This statement is also correct as technological advancements have led to the development of synthetic materials and substitutes for previously essential resources such as rubber and tin.

Therefore, all the above statements are correct.

Question 3

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

If the demand for the resource has decreased but the supply of the resource is unchanged, it means that there is an excess supply of the resource and it has become less scarce. Therefore, in all the other options, we cannot be certain that the natural resource has become scarcer.

Question 4

Despite its status as one of the richest countries in the world, Japan

Accepted Answer

Japan has few natural resources, which means it relies heavily on importing raw materials and resources for its industries. Despite this, Japan has managed to become one of the world's leading economies through its highly developed technology and manufacturing industries.

Question 5

Suppose over the last year that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 130. The price of recycled aluminum increased by

Accepted Answer

The answer of Suppose over the last year that the...

Question 6

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

When the demand for a resource increases and the supply decreases, it is an indication that the resource has become scarcer. This is because there is now competition for a smaller amount of the resource, which drives up prices and creates scarcity.

Question 7

Historically, the market prices of most natural resources (adjusted for inflation) have

Accepted Answer

While there have been fluctuations over time, the overall trend for many natural resources, such as oil, copper, and timber, has been for market prices to remain stable or even decrease over the long term due to improved technology, more efficient extraction methods, and the discovery of new resources. However, there are exceptions, such as during periods of high demand or scarcity caused by natural disasters or geopolitical events.

Question 8

If a good has become more scarce, then we know for sure that

Accepted Answer

A good becoming more scarce can be caused by either an increased demand or a decreased supply. So, it is possible for either one or both to have happened. Therefore, the best answer is C.

Question 9

If natural resources had become scarcer, then we would expect their

Accepted Answer

The answer of If natural resources had become scarcer, then...

Question 10

In a market economy, we know that a resource has become scarcer when

Accepted Answer

The answer of In a market economy, we know that...

Question 11

The behavior of market prices over time indicates that natural resources are

Accepted Answer

The behavior of market prices over time, particularly the decreasing real prices of many natural resources, suggests that technological advancements and efficiency improvements have allowed economies to grow without being limited by natural resource constraints. This indicates that natural resources are not a limit to economic growth, as we have found ways to use them more efficiently or substitute them with other resources or technologies.

Question 12

Greater scarcity of a natural resource is indicated

Accepted Answer

The answer of Greater scarcity of a natural resource is...

Question 13

Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?

Accepted Answer

While natural resources may be helpful, they are not the sole determining factor for economic growth or high standards of living. Countries with few natural resources can still have high standards of living due to factors such as human capital, innovation, and trade.

Question 14

Suppose over the last year that the price of copper increased from ore increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

Accepted Answer

The answer of Suppose over the last year that the...

Question 15

The notion that our ability to conserve natural resources is growing more rapidly than their supplies are dwindling is supported by the fact that

Accepted Answer

The fact that inflation-adjusted prices of most natural resources have been stable or fallen over time suggests that the supply of natural resources is not dwindling more rapidly than our ability to conserve them is growing. If supplies were truly dwindling, we would expect to see prices rising as demand exceeds supply.

Question 16

After adjusting for inflation, over time the prices of most natural resources have been

Accepted Answer

The answer of After adjusting for inflation, over time the...

Question 17

If an inexpensive alternative to oil were found, the price of oil adjusted for inflation

Accepted Answer

If there were an inexpensive alternative to oil, it would decrease the demand for oil as consumers switch to the cheaper alternative. This would then lead to a decrease in the price of oil adjusted for inflation.

Question 18

A leading environmental group recently published a report contending that humans are running a "resource deficit" because we are using natural resources faster than they can be regenerated. The group claims that this means that economic growth will eventually stop, and will even be reversed. An economist would

Accepted Answer

While natural resources are an important factor in economic growth, technological change can greatly mitigate any depletion of resources. Additionally, the report may not take into account future technological advancements that could allow for more efficient use of resources or the development of new resources. Overall, an economist would be more likely to take a more nuanced view of the role of natural resources in economic growth.

Question 19

In the country of Suchnott, the price of silver increased from $30 per ounce to $32 per ounce during a time when the overall price level increased by 5 percent. During this period, the real price of silver

Accepted Answer

The nominal price of silver increased by approximately 6.67% (from $30 to $32), which is more than the overall price level increase of 5%. Therefore, the real price of silver increased.

Question 20

If the price of a good has risen over time,

Accepted Answer

The price of a good can rise due to factors such as an increase in demand or a decrease in supply. However, if we want to determine if the good has become more or less scarce, we need to adjust the price for inflation. Inflation refers to the general increase in prices over time, so if the price of a good has risen less than the rate of inflation, then it has actually become less scarce. Conversely, if the price of a good has risen more than the rate of inflation, then it has become more scarce. Therefore, the correct answer is C.

Quiz 12: Production and Growth

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,300 a ton. Over the same time a measure of the overall price level increased from 168 to 187. The price of iron ore increased by

Which of the following is correct?

In which of the following cases can we be certain that a natural resource has become scarcer?

Despite its status as one of the richest countries in the world, Japan

Suppose over the last year that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 130. The price of recycled aluminum increased by

In which of the following cases can we be certain that a natural resource has become scarcer?

Historically, the market prices of most natural resources (adjusted for inflation) have

If a good has become more scarce, then we know for sure that

If natural resources had become scarcer, then we would expect their

In a market economy, we know that a resource has become scarcer when

The behavior of market prices over time indicates that natural resources are

Greater scarcity of a natural resource is indicated

Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?

Suppose over the last year that the price of copper increased from ore increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

The notion that our ability to conserve natural resources is growing more rapidly than their supplies are dwindling is supported by the fact that

After adjusting for inflation, over time the prices of most natural resources have been

If an inexpensive alternative to oil were found, the price of oil adjusted for inflation

In the country of Suchnott, the price of silver increased from $30 per ounce to $32 per ounce during a time when the overall price level increased by 5 percent. During this period, the real price of silver

If the price of a good has risen over time,