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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?

Make them in their natural state (A) Signup and view all the answers

Which factor determines the value of a natural resource?

The demand for the resource and its availability (B) Signup and view all the answers

What distinguishes a commodity as a natural resource?

Its primary activities of extraction and purification (C) Signup and view all the answers

In what way are natural resources different from capital assets?

Capital assets do not need to be converted into goods to have market value (B) Signup and view all the answers

What are examples of natural resources mentioned in the text?

Soil, timber, wild animals, and water (C) Signup and view all the answers

What is the natural resource 'curse'?

A situation where a country's natural resource brings large revenues but leads to economic stagnation and political instability. (D) Signup and view all the answers

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

The rise in the Dutch currency following the discovery of natural gas, which led to de-industrialization fears. (B) 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?

Rampant rent-seeking behavior from producers, diverting resources away from more productive economic activity. (C) Signup and view all the answers

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

A concentration of economic and political power in the hands of a few. (A) Signup and view all the answers

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

Reduce incentives due to high non-wage income, like dividends and social spending. (B) Signup and view all the answers

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

'Natural resources are neither essential nor sufficient for economic success.' (A) Signup and view all the answers

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