AP Env. Economic Terms

Question 1

Natural Capital

Answer 1

Natural Capital is the environmental stock or resources of Earth that provide goods, flows and ecological services required to support life.

Question 2

Human Capital

Answer 2

Human capital is the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value.

Question 3

Manufactured Capital (One of at least four forms of capital used by people, organizations, corporations, and governments, to build and maintain their livelihoods)

Answer 3

refers to material goods and infrastructure owned, leased or controlled by an organisation that contribute to production or service provision, but do not become embodied in its output. Examples include: tools, technology, machines, buildings and all forms of infrastructure.

Question 4

Free Market

Answer 4

an idealized system in which the prices for goods and services are determined by the open market and by consumers

Question 5

Supply/Demand

Answer 5

relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy.

Demand refers to how much (quantity) of a product or service is desired by buyers.

Supply represents how much the market can offer.

Question 6

Economic Growth

Answer 6

an increase in the amount of goods and services produced per head of the population over a period of time.

Question 7

Economic Development

Answer 7

the process whereby simple, low-income national economies are transformed into modern industrial economies.

a change in a country’s economy involving qualitative as well as quantitative improvements.

Question 8

Open Access Resource

Answer 8

Open Access literature refers to academic outputs that are available online without cost to anybody with access to the internet.

Question 9

Marginal Cost

Answer 9

the cost added by producing one additional unit of a product or service.

Question 10

Cost Benefit Analysis

Answer 10

A cost-benefit analysis is a process businesses or analysts use to analyze decisions to evaluate all the potential costs and revenues.

Gives you a simple, quantitative approach for deciding whether to go ahead with a decision.

Question 11

Market Price

Answer 11

the price of a commodity when sold in a given market. The current price at which an asset or service can be bought or sold.

Question 12

Direct Price

Answer 12

a price that can be completely attributed to the production of specific goods or services

Question 13

Indirect Cost

Answer 13

are costs used by multiple activities, and which cannot therefore be assigned to specific cost objects. But identified with two or more final cost objectives or an intermediate cost objectives.

Question 14

Direct Cost

Answer 14

A direct cost is a price that can be completely attributed to the production of specific goods or services.Costs which are directly accountable to a cost object

Question 15

Internal Cost

Answer 15

costs that a business bases its price on. They include costs like materials, energy, labour, plant, equipment and overheads.

Question 16

External Cost

Answer 16

The cost or benefit that affects a party who did not choose to incur that cost or benefit. Is a cost that a transaction or activity imposes on a party that is not part of the transaction or activity. In other words, it is a cost imposed on a party that cannot control whether or not the transaction or activity occurs. (

Question 17

Hidden Costs

Answer 17

Expenses that are not normally included in the purchase price for a piece of equipment or machine e.g. maintenance, supplies, training, support and upgrades.

Question 18

Full Cost Pricing

Answer 18

Is a price-setting method under which you add together the direct material cost, direct labor cost, selling and administrative costs, and overhead costs for a product, and add to it a markup percentage (to create a profit margin) in order to derive the price of the product

Question 19

GDP (gross domestic product)

Answer 19

Measures the value of economic activity within a country.

Question 20

GNP (gross national product)

Answer 20

is an estimate of total value of all the final products and services turned out in a given period by the means of production owned by a country’s residents

Question 21

Per Capita

Answer 21

for each person; in relation to people taken individually. Per capita is a Latin term that translates into “by head,” and basically means the “average per person.” Per capita can take the place of saying “per person” in any number of statistical observances

Question 22

GPI (Genuine Progress Indicator)

Answer 22

is a metric used to measure the economic growth of a country

Question 23

Product Ecolabeling / Certification

Answer 23

is a voluntary method of environmental performance certification and labelling that is practised around the world.

Question 24

Subsidies

Answer 24

a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.
“a farm subsidy”

Question 25

Green Taxes

Answer 25

Tax paid by consumers for products or services that are not environmentally friendly

Read more: http://www.businessdictionary.com/definition/green-tax.html

Question 26

Green Washing

Answer 26

Greenwashing is the use of marketing to portray an organization’s products, activities or policies as environmentally friendly when they are not. Greenwashing is the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology or company practice. Can make a company appear to be more environmentally friendly than it really is.

Question 27

Cap and Trade (Tradable Pollution)

Answer 27

cap and trade system is a market-based approach to controlling pollution that allows corporations or national governments to trade emissions allowances under an overall cap, or limit, on those emissions

Question 28

Principles of Sustainability

Answer 28

An environmentally sustainable society is one that meets the current and future basic resource needs of its people in a just and equitable manner without compromising the ability of future generations to meet their basic needs

Question 29

High Throughput Economy

Answer 29

Situation in most advanced industrialized countries, in which ever-increasing economic growth is sustained by maximizing the rate at which matter and energy resources are used, with little emphasis on pollution prevention, recycling, reuse, reduction of unnecessary waste, and other forms of resource conservation