University of Washington                        Geography 207                             Autumn 1998

  FOURTH HOUR TEST

Resources, Economic Growth, and Economic Development


 


  Name:__________________________________________ Student No.:___________________

Write your name and student number above, and on the machine-graded form. Mark your form with the letter corresponding to the one, best answer to each question below. There are 40 questions. This test is worth 15 points toward the quarter’s total of 100 points. You have 50 minutes.

1. Anything in the natural world which we think might have value:

    1. maximum sustainable yield
    2. production
    3. projected reserves
    4. proven reserves
    5. resources
2. Natural resources that are known and available for use with current technology and at current prices:
    1. maximum sustainable yield
    2. production
    3. projected reserves
    4. proven reserves
    5. resources
3. The amount of a given natural resource that is used or removed during a specific time period:
    1. maximum sustainable yield
    2. production
    3. projected reserves
    4. proven reserves
    5. resources
4. Those natural resources that are likely to become economically viable to develop and use by some specific future date, based on: our knowledge of their approximate location and characteristics; and our expectations about the state of extraction technologies and market prices at that future date —
    1. maximum sustainable yield
    2. production
    3. projected reserves
    4. proven reserves
    5. resources
5. What would be the best label for line L in the illustration (next page) of the demographic transition?
    1. birth rates
    2. death rates
    3. economic development
    4. rate of natural increase
    5. structural change


6. What would be the best label for line M in the above illustration of the demographic transition?

    1. birth rates
    2. death rates
    3. economic development
    4. rate of natural increase
    5. structural change
7. What would be the best label for line N in the above illustration of the demographic transition?
    1. birth rates
    2. death rates
    3. economic development
    4. rate of natural increase
    5. structural change
8. What’s measured along the horizontal axis of the figure above?
    1. distance
    2. number of countries in the system being modeled
    3. population growth rate
    4. size of population at the beginning of the period
    5. time
9. Which of the following statements suggests an "economic" approach to resource scarcity?
    1. Depletion of fixed or renewable stocks of a resource may occur too quickly for new resources to be found or for the damage to be repaired.
    2. Scarcity should result in higher prices, which should reduce consumption and lead to a search for substitutes.
    3. Sovereign countries must agree voluntarily to policies to reduce the rate of resource depletion.
    4. The distribution of resource locations should be equitable with respect to the locations of concentrations of various ethnic and income groups.
    5. The physical environment contains an inexhaustible supply of resources, if we could only find them.
10. Which of the following statements suggests an "environmentalist" approach to resource scarcity?
    1. Depletion of fixed or renewable stocks of a resource may occur too quickly for new resources to be found or for the damage to be repaired.
    2. Scarcity should result in higher prices, which should reduce consumption and lead to a search for substitutes.
    3. Sovereign countries must agree voluntarily to policies to reduce the rate of resource depletion.
    4. The distribution of resource locations should be equitable with respect to the locations of concentrations of various ethnic and income groups.
    5. The physical environment contains an inexhaustible supply of resources, if we could only find them.
11. Which of the following statements suggests a "political" approach to resource scarcity?
    1. Depletion of fixed or renewable stocks of a resource may occur too quickly for new resources to be found or for the damage to be repaired.
    2. Scarcity should result in higher prices, which should reduce consumption and lead to a search for substitutes.
    3. Sovereign countries must agree voluntarily to policies to reduce the rate of resource depletion.
    4. The distribution of resource locations should be equitable with respect to the locations of concentrations of various ethnic and income groups.
    5. The physical environment contains an inexhaustible supply of resources, if we could only find them.
12. According to the New York Times series on energy prices and consumption, gasoline prices in the U.S. are now:
    1. higher than at any time since the second oil shock of 1979
    2. lower in nominal and in real (inflation-adjusted) terms than they were during the first oil crisis of 1973
    3. lower in real (inflation-adjusted) terms than they were during the first oil crisis of 1973
    4. motivating slow but steady increases in the gas mileage of new passenger vehicles
    5. only two-thirds what they are in Europe
13. According to the New York Times series on energy prices and consumption, what has prompted the current (1997-98) trend in world oil prices?
    1. failure of OPEC to enforce its production limits on member countries
    2. high taxes on petroleum products in Europe
    3. revolution in Iran and war in Iraq
    4. the Arab oil embargo (limits placed on exports to the U.S.)
    5. The world economic crisis has reduced demand for oil.
14. According to the New York Times series on energy prices and consumption, which statement characterizes the U.S. relative to Europe?
    1. lower prices for energy despite higher taxes on energy, higher consumption of energy per capita, higher consumption of energy per unit of GDP
    2. lower prices for energy, lower taxes on energy, higher consumption of energy per capita, higher consumption of energy per unit of GDP
    3. lower prices for energy, lower taxes on energy, higher consumption of energy per capita, but roughly equal consumption of energy per unit of GDP
    4. lower prices for energy, roughly equivalent taxes on energy, higher consumption of energy per capita, higher consumption of energy per unit of GDP

 
 

Questions 15-20 refer to these equations: Q = Qb (1 + a) , where a = Qn / Qb .


 










15. What determines the size of the regional economy modeled by these simple equations?

    1. per capita income multiplied by the population of the region
    2. the capacity of the economy (size of labor force, capital availability, natural resources)
    3. the total wealth of the region’s households
    4. the value of goods and services available to the citizens of the region
    5. the value of goods and services exported from the region
16. This approach makes no sense if we are trying to determine the economic size (or growth) of
    1. a household.
    2. a small country.
    3. a state in the U.S.
    4. the U.S.
    5. the world.
17. What’s the multiplier in the equations above?
    1. 1 + a
    2. a
    3. Qb
    4. Qb / Qn
    5. Qn
18. Imagine a household in which all income is earned from labor employment (there’s no rental income, no investment income, no sales of garden vegetables). What is the value of a for that household?
    1. meaningless, because 1/0 has no meaning
    2. one
    3. one half
    4. zero
19. How do we use generally this model to develop a forecast of the size of the regional economy in a future year?
    1. Forecast the change in the multiplier, and apply the new multiplier to the ratio of nonbasic to basic activity in the region.
    2. Forecast the population growth in the region, and multiply the new population by the per capita income.
    3. Forecast the ratio of basic to nonbasic activity in the future year, and multiply by the amount of nonbasic activity in the current year.
    4. Forecast the size of the basic sector in the future year, and apply the multiplier.
    5. Measure the percentage change in the region’s economy in the previous year, and apply that rate of change to the number of years between now and the specific year for which a forecast is needed.
20. This model assumes that we can divide a regional economy into
    1. export-oriented production and all other production.
    2. export-oriented production, locally-oriented production, and non-basic production.
    3. exports, imports, and local production for local use.
    4. growth sectors and multiplier sectors.
    5. location-quotient sectors and basic sectors.
21. What is a location quotient?
    1. location rent at a particular point divided by the average location rent in the region
    2. the percentage of a regional economy that is composed of basic activity
    3. the proportion of a region’s demand for a product that is satisfied from production within the region
    4. the ratio between a sector’s proportion of a region’s economy and that sector’s proportion of the national economy
    5. the size of a basic sector as a proportion of the region’s overall economy
22. As an economy becomes more complex (additional industries within the economy, perhaps with an increasing proportion of secondary and then of tertiary sectors), what generally happens to the economic-base multiplier?
    1. It decreases.
    2. It doesn’t change, because it is a constant.
    3. It doesn’t change, because it is the ratio of nonbasic to basic activities.
    4. It increases.
23. Which of the following implies a change in the sectoral composition (the mix and proportion of specific industries) of an economy?
    1. demographic transition
    2. economic development
    3. extensive economic growth
    4. intensive economic growth
    5. polarization
24. Which of the following is defined as an increase in per capita income?
    1. development
    2. economic development
    3. extensive economic growth
    4. intensive economic growth
    5. polarization
25. Which of the following implies changes in the social institutions of a territory, as well as changes in the structure of the territorial economy?
    1. development
    2. economic development
    3. extensive economic growth
    4. intensive economic growth
    5. polarization
26. According to the Seattle Times article that debated the utility of regional economic multipliers, which of the following helps explain why Boeing’s announced employment cuts may have a different multiplier than that estimated for Boeing’s employment increases?
    1. Because Boeing is the only producer of large, commercial aircraft in North America, when it reduces employment, its workers have no other job prospects. Therefore, the multiplier for Boeing’s cuts is larger than the multiplier for Boeing’s expansions.
    2. Boeing is such a large part of the regional economy that its employment cuts change the region’s basic-nonbasic ratio. Therefore, the multiplier for Boeing’s cuts is larger than the multiplier for Boeing’s expansions.
    3. Many laid-off employees remain in the region and continue to make their household purchases from savings, unemployment compensation, and/or different employment. Therefore, the employment cuts shrink the regional economy by a smaller multiplier than do employment increases that bring people into the region.
    4. Most of Boeing’s economic impact comes from its purchases from local suppliers. When it makes fewer airplanes, the smaller of those suppliers may go out of business. Therefore, Boeing’s cuts shrink the regional economy by a larger multiplier than do Boeing’s expansions.
27. While we have emphasized a single multiplier for a given region, it is possible to estimate different multipliers for different industries or even different companies in a regional economy. The Seattle Times article that debated the utility of regional economic multipliers suggests that Microsoft’s employment multiplier is
    1. larger than Boeing’s because of Microsoft’s greater proportion of purchases from within the region.
    2. larger than Boeing’s because of Microsoft’s larger employment.
    3. smaller than Boeing’s because Boeing relies more on local suppliers.
    4. smaller than Boeing’s because Microsoft’s major input is labor, rather than material components.
    5. smaller than Boeing’s because of Microsoft’s lower average salaries.
28. The economic-base model of economic growth (applying a multiplier to changes in basic activity) is most closely aligned with which strategy of economic development?
  1. capacity building
  2. demographic transition
  3. development stages
  4. export promotion
  5. import substitution
29. The infant-industry argument for trade protection is a rationale for which strategy of economic development?
    1. capacity building
    2. demographic transition
    3. development stages
    4. export promotion
    5. import substitution
30. The state government policy of tax abatements in the MegaWidget Case is an example of which economic-development strategy?
    1. capacity building
    2. demographic transition
    3. development stages
    4. export promotion
    5. import substitution
31. Which statement best describes the first stage of the demographic transition?
  1. falling birth rates and low death rates
  2. high birth rates and falling death rates
  3. high birth rates and high death rates
  4. low birth rates and low death rates
  5. rising birth rates and high death rates
32. Which statement best describes the second stage of the demographic transition?
  1. falling birth rates and low death rates
  2. high birth rates and falling death rates
  3. high birth rates and high death rates
  4. low birth rates and low death rates
  5. rising birth rates and high death rates
33. Which statement best describes the third stage of the demographic transition?
  1. falling birth rates and low death rates
  2. high birth rates and falling death rates
  3. high birth rates and high death rates
  4. low birth rates and low death rates
  5. rising birth rates and high death rates
34. Which statement best describes the fourth stage of the demographic transition?
  1. falling birth rates and low death rates
  2. high birth rates and falling death rates
  3. high birth rates and high death rates
  4. low birth rates and low death rates
  5. rising birth rates and high death rates
35. What causes the decline of birth rates over the demographic transition?
    1. cultural and economic change
    2. increased death rates for women in child-bearing years
    3. outmigration
    4. the passage of time
    5. public-health improvements
36. What causes the decline of death rates over the demographic transition?
    1. cultural and economic change
    2. increase in the average age of the population
    3. outmigration
    4. public-health improvements
    5. the passage of time
37. Which of the following is not among the ways of seeing economic development as a process or a progression from "less-developed" to "developed" (or "advanced")?
    1. cumulative causation
    2. declining shares of labor employment in agriculture, then in manufacturing
    3. demographic transition
    4. sectoral change through increased processing of natural resources to develop manufacturing sectors
38. Which of the following can help break the cycle of development as a polarizing process?
    1. economies of agglomeration
    2. economies of scale
    3. factor mobility
    4. new-product invention in wealthy settings
39. The import substitution strategy of development is best suited for countries that
    1. have access to large foreign markets.
    2. have few domestic natural resources.
    3. have large domestic markets.
40. The export promotion strategy of development is best suited for countries that
    1. have access to large foreign markets.
    2. have small domestic markets.
    3. restrict most imports of manufactured goods.
copyright 1998, James W. Harrington, Jr.