Econ 423 -- Environmental and Natural Resources Economics (Fall ’08) Quiz 1, Professor Steven Hackett

Your name: An Swerkey

Price ($)	Quantity Supplied	Quantity Demanded
50	30,000	150,000
100	40,000	140,000
150	50,000	130,000
200	60,000	120,000
250	70,000	110,000
300	80,000	100,000
350	90,000	90,000
400	100,000	80,000
450	110,000	70,000
500	120,000	60,000

1. What is the equilibrium price $350 and quantity 90,000 in the table above?

2. At what price in the table above is there an excess supply of 40,000? $450

3. Which of the following, if any, would usually cause equilibrium market price to rise? (circle any/all correct answers)

Inward shift in demand Cheaper material inputs used to produce the good

Internalizing a negative externality Outward shift in supply

4. Complete the sentence: Economics is the study of how scarce resources, goods, and services are allocated among competing uses

5. True/False (circle one): Scarcity, and thus economics, is not an entirely an artificial construct created by capitalist enterprises – it existed in some form or another in agrarian and hunter-gatherer societies.

6. True/False (circle one): For a public policy alternative to be Pareto efficient relative to the status-quo, it must generate the largest total net benefits to society, even if some members of society are made worse off.

7. True/False (circle one): If there are four policy options for managing a parcel of National Forest land, then the opportunity cost of the preferred option would be the value of the next best option (however that might be measured) .

8. True/False (circle one): Under deontological ethics, action is guided by duty, not by the likely consequences.

9. True/False (circle one): In a purely capitalist market system of allocation, the economic questions of (i) what to produce, (ii) how to produce, and (iii) for whom are answered by (i) fulfillment of production quotas, (ii) from each according to their ability, and (iii) to each according to their need.

10. True/False (circle one): In a market with negative externalities, equilibrium price does not reflect full marginal social cost, and like a subsidy, this leads to excessive production and consumption of the good.