5 Written Questions
5 Matching Questions
- Implicit Costs
- User Cost
- Future Value
- Present Value
- Nominal Interest Rate
- a the opportunity cost of extracting and selling a nonrenewable resource today rather than waiting to extract and sell the resource in the future; the present value of the decline in future revenue that will occur because a nonrenewable resource is extracted and sold today rather than being extracted and sold in the future.
- b today's value of some amount of money that is to be received sometime in the future.
- c the amount to which some current amount of money will grow if the interest earned on the amount is left to compound over time.
- d the interest rate expressed in terms of annual amounts currently charged for interest and not adjusted for inflation.
- e the monetary income a firm sacrifices when it uses a resource it owns rather than supplying the resource in the market; equal to what the resource could have earned in the best-paying alternative employment; includes a normal profit.
5 Multiple Choice Questions
- things such as forests, water in reservoirs, and wildlife that are capable of growing back or building back up (renewing themselves) if they are harvested at moderate rates.
- all costs associated with extracting a natural resource and readying it for sale.
- a rapid decline in a fishery's population because its fish are being harvested faster than they can reproduce.
- the total benefits of some activity or policy less the total costs of that activity or policy.
- the total revenue of a firm less its economic costs (which include both explicit and implicit costs); also called "pure profit" and "above-normal profit."
5 True/False Questions
Usury Laws → state laws that specify the maximum legal interest rate at which loans can be made.
Individual Transferable Quotas (ITQs) → a limit set by government or a fisheries commission on the total number of fish or tonnage of fish that fishers collectively can harvest during some particular time period.
Conflict Diamonds → diamonds that are mined and sold by combatants in war zones in Africa as a way to provide currency needed to finance their military activities.
Time-Value of Money → the idea that a specific amount of money is more valuable to a person the sooner it is received because the money can be placed in a financial account or investment and earn compound interest over time; the opportunity cost of receiving a sum of money later rather than earlier.
Single-Tax Movement → the total benefits of some activity or policy less the total costs of that activity or policy.