Natural Resources and Commodities Quiz
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Questions and Answers

Wildlife, which is one of the important natural resources of Ethiopia, has a relatively low contribution to the country’s economic development

  • Its usefulness to production (correct)
  • The amount of material available
  • Its conversion into goods
  • Its value in the market
  • What makes a commodity generally considered a natural resource?

  • Extraction and purification activities (correct)
  • Conversion into goods
  • Creation through human activity
  • High market demand
  • Why do natural resources have to be converted or could be converted into goods in order to assume a market price?

  • To affect their quality and capacity
  • To become exchangeable for money (correct)
  • To make them directly usable
  • To increase their monetary value
  • What do humans not do in relation to natural resources?

    <p>Make them in their natural state</p> Signup and view all the answers

    Which factor determines the value of a natural resource?

    <p>The demand for the resource and its availability</p> Signup and view all the answers

    What distinguishes a commodity as a natural resource?

    <p>Its primary activities of extraction and purification</p> Signup and view all the answers

    In what way are natural resources different from capital assets?

    <p>Capital assets do not need to be converted into goods to have market value</p> Signup and view all the answers

    What are examples of natural resources mentioned in the text?

    <p>Soil, timber, wild animals, and water</p> Signup and view all the answers

    What is the natural resource 'curse'?

    <p>A situation where a country's natural resource brings large revenues but leads to economic stagnation and political instability.</p> Signup and view all the answers

    What is an example of the 'Dutch Disease' as mentioned in the text?

    <p>The rise in the Dutch currency following the discovery of natural gas, which led to de-industrialization fears.</p> Signup and view all the answers

    What can happen if a country with huge natural resource income has ill-defined property rights and weak legal structures?

    <p>Rampant rent-seeking behavior from producers, diverting resources away from more productive economic activity.</p> Signup and view all the answers

    What is one potential consequence of abundant natural resources according to the text?

    <p>A concentration of economic and political power in the hands of a few.</p> Signup and view all the answers

    How may abundant natural resources impact private and public incentives to accumulate human capital?

    <p>Reduce incentives due to high non-wage income, like dividends and social spending.</p> Signup and view all the answers

    What is one argument put forth by some authors regarding natural resources and economic success?

    <p>'Natural resources are neither essential nor sufficient for economic success.'</p> Signup and view all the answers

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