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[FREE] Chapter 16 Economics Test Answers
Question 4 Which of the following might help to make the distribution of original incomes more unequal? Question 5 Which of the following might help to make original incomes less unequal? Question 6 Many rich people support government policies for...
Found: 24 May 2021 | Rating: 95/100
[DOWNLOAD] Chapter 16 Economics Test Answers | HOT!
Normally, only very large acquisitions are evaluated by examining the impact of the acquisition on the financial net income. The tax model is used only if an after-tax analysis is done. Cash flows for the project are forecast for each year or each...
Found: 24 May 2021 | Rating: 93/100
Chapter 16 Aid And Growth In Kenya: A Time Series Approach
Shrinkage In the model defined in Fig. Usually the decline curves that are used to forecast future revenues are based on production rather than sales. If there is significant shrinkage, that should be taken into account before calculating the cash flows. Typical causes of shrinkage include lease use of gas for heater treaters or compressor fuel. If shrinkage is negligible, gross sales will equal gross production. Typically, the people who drill and operate a well do not own the minerals they are extracting.
Found: 24 Apr 2021 | Rating: 88/100
For example, the U. Government, state governments, Indian tribes, or private citizens usually own minerals in the United States. In most other countries, the state usually owns the minerals. The producers lease the right to develop the minerals from the mineral owners. This leads to various kinds of interests in the property. Working Interest Working interest is a share of the costs. The total of all the working interests in a well must be equal to one. Along with the share of the costs comes a reduced usually share of the revenue. Working interest may also change over time as a result of "oil field deals. As deals become more and more complex, it becomes very difficult to determine ownership.
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Chapter 16: Multiple Choice Questions
One method of answering the "who, what, when" question is discussed in Thompson and Wright [1]. Royalty Royalty is a share of the revenue free and clear of all costs of development and production. The royalty is paid to the owner of the mineral interest under the land associated with the well. In the United States, the mineral interest can be "severed" from the surface ownership so that the person who owns the surface may not have any interest in the minerals and may not receive any income from a well. In rare cases the owners of the working interest will own the minerals and, in that case, there is no royalty.
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Test Answers On Chapter 16 Questions
Typical royalty rates in the U. Overriding Royalty Overriding royalty is the same as a royalty, except it does not come about because of ownership of the mineral interest. An "override" is a classic way for a lease broker or geologist to be compensated for buying leases or putting a deal together. Net Revenue Interest For net revenue interest, the working interest owners pay all of the costs. The share of the gross production from the well is referred to as "net revenue interest. Net Sales Net sales is the product of gross sales and net revenue interest. It is your share of the production after accounting for shrinkage, royalties, and splitting the proceeds with other working interest owners. Price Oil is usually priced in U. Be careful to use the same volume units on the sales forecast and the price forecast. There are several "benchmark" crudes in the world, for which the price is reported on a daily basis. The most commonly quoted number in the U. Because of its excellent liquidity and price transparency, the contract is used as a principal international pricing benchmark.
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The actual price received by a producer is usually set for several days or one month at a time and may include a transportation charge, which reduces the effective price, or a bonus depending upon the supply and demand conditions in the local area. Many refiners are posting prices online, and these postings change rapidly. Conoco, for example, posted different prices between January 1, and August 31, , while Enron had different prices in the same period. When this chapter was first drafted in September , the links to the postings were Conoco, Enron, Tosco, and Phillips.
Found: 12 Apr 2021 | Rating: 92/100
Since then, Enron went out of business, while Phillips purchased Tosco and then merged with Conoco. Projecting the future price of oil to use in an evaluation is quite difficult, and unfortunately, oil price is usually one of the most important factors in the evaluation. One popular, although not necessarily accurate, way of projecting future prices is to use a forward "strip" either from the NYMEX or from other crude oil traders. A differential between the property being evaluated and the NYMEX is then applied to estimate prices at the property.
Found: 28 Apr 2021 | Rating: 90/100
Natural gas prices are also quoted at more than 50 market centers throughout the United States. In October , the NYMEX began trading options on natural gas futures, which allowed traders and speculators to "play" the market. Future gas prices for use in an economic evaluation are often forecast in the same manner as previously described for oil. The NYMEX trades in "paper barrels," in which the seller of a contract either has to purchase an offsetting contract or deliver a specified volume of a specified quality of hydrocarbon at a specified location. The forward strip shows the month when the crude or natural gas will have to be delivered; the prices at which the contract traded during the day; the number of contracts "open" open interest where the obligation to deliver the commodity still exists; and the number of contracts traded during the previous day. This volume represents more than one-half the crude oil produced in the United States during October State and Local Taxes In the U.
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Service Unavailable In EU Region
This tax may range from 3 to This tax is often referred to as an ad valorem tax from the Latin for "according to value. The method of calculating assessed value varies considerably from state to state. The two most common methods of calculating assessed value are to use some fraction of the revenue received and to use some fraction of the calculated net present value of the projected production. In most cases, each party pays their own severance and ad valorem taxes.
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In other words, the working interest owners only pay state and local taxes on their share of the production, and the royalty owners pay the tax on their share of the production. In countries other than the U. In most cases there are numerous other taxes that may need to be taken into account such as road taxes, airport taxes, or stamp duties. The oil company usually attempts to negotiate an agreement that exempts them from all these taxes in return for a royalty or a share of the production. These negotiations are sometimes successful and sometimes not. Operating Costs Operating costs are those costs that are necessary to maintain production from the well. Offshore wells can have even higher operating costs. These discussions frequently have resulted in the creation of guideline documents and educational materials.
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Chapter 16 - Extending The Analysis Of Aggregate Supply
You can find these materials in the Products section of this site. Operating costs in other countries can vary dramatically. In most cases the operating costs will include facilities to house expatriate workers and their dependents as well as other normal operating expenses. Depending on the situation, these costs can be very significant in the cash flow calculations. Net Operating Income Sometimes called "cash generated from operations" or other names, net operating income is the cash flow to the working interest owner after operating costs and state and local taxes have been paid, but before investments have been made. This represents the cash generated during the period that is available for investment. Income Tax Almost all federal governments including the United States Government and most state governments levy a tax on income. The calculation of these taxes can be fairly straightforward in countries such as Indonesia or extremely difficult, especially when a single project is being evaluated for a reasonably large company in the U.
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CRCST Chapter 16 (8th Edition) Review Quiz
Even when the appropriate software is available to aid in the evaluation, the input data necessary to accurately calculate income tax is often hard to obtain. For this reason and because income tax often has a relatively low impact on the final decision, it is common practice to calculate before federal income tax BFIT net cash flows when evaluating U. Major oil companies are more likely to attempt to include the effects of income tax in their calculations, while independents seldom include it. The effect of using BFIT numbers on the ultimate decision is highly dependent on the individual case, but experience indicates that in the U.
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Investment Investments are costs that benefit future periods as opposed to operating costs that only benefit the current period. Examples include buying a lease, drilling a well, buying and installing a pumping unit, and building tank batteries. In all of these cases, the goods purchased are expected to help produce money far into the future. Net Cash Flow Net cash flow is the amount of money that flows into or out of the treasury during any one period. It is equal to the net operating income either before or after income taxes less the investments. Each of these items is estimated for every future time period until the net operating income is no longer positive. At that time the well s is are usually assumed to be plugged and abandoned. There may be an additional expense at that time for abandonment costs, or the salvage value of the equipment may be equal to or greater than the abandonment costs.
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Economics Chapter 16 Flashcards
Time Value of Money Money has a time value. This means a dollar received today has more value to us than a dollar received far in the future. Other than a desire for instant gratification, there is a very rational reason for this phenomenon. If we have a dollar today, we can put it to work by making an investment and have more than a dollar at some future date. This concept of putting the money to work has important implications later in this section when discount rates are discussed.
Found: 8 Apr 2021 | Rating: 89/100
Chapter 16: The Basics Of Study Skills
Learning Objectives Define economics. Explain the concepts of scarcity and opportunity cost and how they relate to the definition of economics. Understand the three fundamental economic questions: What should be produced? How should goods and services be produced? For whom should goods and services be produced? Economics is a social science that examines how people choose among the alternatives available to them. It is social because it involves people and their behavior. It is a science because it uses, as much as possible, a scientific approach in its investigation of choices.
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Economics: Principles In Action - Mr. D's Social Studies Site
Scarcity, Choice, and Cost All choices mean that one alternative is selected over another. Selecting among alternatives involves three ideas central to economics: scarcity, choice, and opportunity cost. Scarcity Our resources are limited. At any one time, we have only so much land, so many factories, so much oil, so many people. But our wants, our desires for the things that we can produce with those resources, are unlimited. We would always like more and better housing, more and better education—more and better of practically everything.
Found: 21 Apr 2021 | Rating: 88/100
Oxford University Press | Online Resource Centre | Chapter 16
If our resources were also unlimited, we could say yes to each of our wants—and there would be no economics. Because our resources are limited, we cannot say yes to everything. To say yes to one thing requires that we say no to another. Whether we like it or not, we must make choices. Our unlimited wants are continually colliding with the limits of our resources, forcing us to pick some activities and to reject others.
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Chapter 16 - The Monetary System - Questions For Review - Page 342: 1
Scarcity is the condition of having to choose among alternatives. A scarce good is one for which the choice of one alternative requires that another be given up. Consider a parcel of land. The parcel presents us with several alternative uses. We could build a house on it. We could put a gas station on it. We could create a small park on it. We could leave the land undeveloped in order to be able to make a decision later as to how it should be used. Suppose we have decided the land should be used for housing. Should it be a large and expensive house or several modest ones? Suppose it is to be a large and expensive house. Who should live in the house? If the Lees live in it, the Nguyens cannot. There are alternative uses of the land both in the sense of the type of use and also in the sense of who gets to use it.
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The fact that land is scarce means that society must make choices concerning its use. Virtually everything is scarce. Consider the air we breathe, which is available in huge quantity at no charge to us. Could it possibly be scarce? The test of whether air is scarce is whether it has alternative uses. What uses can we make of the air? We breathe it. We pollute it when we drive our cars, heat our houses, or operate our factories. In effect, one use of the air is as a garbage dump. We certainly need the air to breathe. But just as certainly, we choose to dump garbage in it. Those two uses are clearly alternatives to each other.
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Economics Security Valuation And Portfolio Theory
The more garbage we dump in the air, the less desirable—and healthy—it will be to breathe. If we decide we want to breathe cleaner air, we must limit the activities that generate pollution. Air is a scarce good because it has alternative uses. Not all goods, however, confront us with such choices. A free good is one for which the choice of one use does not require that we give up another. One example of a free good is gravity. The fact that gravity is holding you to the earth does not mean that your neighbor is forced to drift up into space! There are not many free goods. Outer space, for example, was a free good when the only use we made of it was to gaze at it. But now, our use of space has reached the point where one use can be an alternative to another. Conflicts have already arisen over the allocation of orbital slots for communications satellites. Thus, even parts of outer space are scarce.
Found: 5 Apr 2021 | Rating: 92/100
Quiz: Mankiw, Principles Of Microeconomics 5e, Chapter 16
Space will surely become more scarce as we find new ways to use it. Scarcity characterizes virtually everything. Consequently, the scope of economics is wide indeed. Scarcity and the Fundamental Economic Questions The choices we confront as a result of scarcity raise three sets of issues. Every economy must answer the following questions: What should be produced? Producing better education, for example, may require cutting back on other services, such as health care. A decision to preserve a wilderness area requires giving up other uses of the land.
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Economics U$A: 21st Century Edition
Every society must decide what it will produce with its scarce resources. There are all sorts of choices to be made in determining how goods and services should be produced. Should a firm employ a few skilled or a lot of unskilled workers? Should it produce in its own country or should it use foreign plants? Should manufacturing firms use new or recycled raw materials to make their products? If a good or service is produced, a decision must be made about who will get it. A decision to have one person or group receive a good or service usually means it will not be available to someone else. Should it? Every economy must determine what should be produced, how it should be produced, and for whom it should be produced.
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Answer Key Chapter 16 - Principles Of Macroeconomics 2e | OpenStax
If the book is the most valuable of those alternatives, then the opportunity cost of the plant is the value of the enjoyment you otherwise expected to receive from the book. The concept of opportunity cost must not be confused with the purchase price of an item. Consider the cost of a college or university education. That includes the value of the best alternative use of money spent for tuition, fees, and books. But the most important cost of a college education is the value of the forgone alternative uses of time spent studying and attending class instead of using the time in some other endeavor. Students sacrifice that time in hopes of even greater earnings in the future or because they place a value on the opportunity to learn. Or consider the cost of going to the doctor. Part of that cost is the value of the best alternative use of the money required to see the doctor. But, the cost also includes the value of the best alternative use of the time required to see the doctor.
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Chapter 16 Economics Test Answers
The essential thing to see in the concept of opportunity cost is found in the name of the concept. Opportunity cost is the value of the best opportunity forgone in a particular choice. It is not simply the amount spent on that choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics. A good is scarce if the choice of one alternative requires that another be given up.
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Multiple Choice Questions For Economics With Answers
Lifestyle As this economics chapter 1 section 2 assessment answers, it ends going on bodily one of the favored ebook economics chapter 1 section 2 assessment answers collections that we have. This question comprises of two negatives which creates confusion to the respondents and may lead to biased response. Do you eat noodles? Created by. Question 4. Each society answers the three basic economic questions based on Learn vocabulary, terms, and more with flashcards, games, and other study tools. Question 1. We can start using the table from anywhere, i. For additional practice, visit this book's Online Learning Center at glencoe. Explain the procedure of selecting a random sample of 3 students out of 10 in your class, by using random number tables. The answer to one depends very much on the answers to the others. Here, the largest serial number is 10 which is a two digit number and therefore we consult two digit random numbers in sequence.
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Macroeconomics (McGraw-Hill Economics)
How many samples are possible? A representative random sample of 3 students can be taken out of 10 through lottery method. Suppose there are 10 students in your class. State whether the following statement are true or false. Chapter 6: Supply and Demand. Since the solution to 1 from Section 5 chapter was b In terms of accuracy of results, census is better as it studies all the units of population but this method is very time consuming, expensive and sometimes not feasible to use. Chapter 1 - economics basics - questions and answers Practical question Chapter 1 to 5 University. Grab the opportunity to find free assignment answers related to all subjects in your Academic. People can choose their employer, where and when they work, and how they spend their money.
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Chapter 16 Aid And Growth In Kenya: A Time Series Approach | Emerald Insight
The population or the Universe in statistics means totality of the items under study. Which of the following methods give better results and why? Academic year. Click the mouse button or press the Space Bar leahhht. True Yes. Question 6. Better question would be Do you think plastic bags should be banned? Chapter 4: Demand. Terms in this set 10 Safety Net. Do your parents also like vegetable atta noodles? Terms in this set 17 What determines whether a business's supply curve is elastic or inelastic? How many packets do you consume in a month? Answer: leahhht. Out of these students were randomly selected and their weight was recorded.
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Economics U$A: 21st Century Edition - Annenberg Learner
Time Saving Huge amount of time is required to conduct a census survey while sample studies do not take that much time. Answer: Spell. The series of questions should move from general to specific. Standard of Living. In such cases even lottery method will not give random sample. The correct order would be economics chapter 2 guided reading. A sample refers to a group or section of the population from which information is to be obtained. A good sample representative sample is generally smaller than the population and is capable of providing reasonably accurate information about the population. It is a group to which the results of the study are intended to apply. The pathologist took 2 ml of his blood for the … Similarly, if the same name or number is written on more than one slip and if some name or number is missed then also the chances of selection of different units of population in the sample will not be equal.
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Quiz: Mankiw, Principles Of Microeconomics 5e, Chapter 16
Variable under study, is the haemoglobin in the blood sample. Terms in this set 40 Safety Net. Markets play a relatively large role in US economics. Answer: Question 3. Economics: Chapter 5 Section 1. What do you think about the following questions. Find test answers and questions for online tests. In general, you use combinations to determine the number of ways you can select a sample of size n from a population of size N. The formula for the number of such combinations is It is difficult to minimise non-sampling error even by taking a large sample as they include Errors in Data Acquisition, Non-Response Errors and Sampling bias. Number of samples possible can be calculated as follows They are available either in a published form or can be generated by using appropriate software packages.
Found: 13 Apr 2021 | Rating: 87/100
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