Enviro Test 1

Question 1

Economics

Answer 1

The study of decision making

The allocation of scarce resources

Question 2

Positive Economics

Answer 2

What is

Question 3

Normative Economics

Answer 3

What should be

Question 4

Renewable Resource

Answer 4

Can be replenished over time

Ex. Fish

Question 5

Non-renewable Resource

Answer 5

Cannot be replenished

Ex. Fossil fuels

Question 6

Ambient Quality

Answer 6

Air, nebulous

Question 7

Environmental Quality

Answer 7

World around us

Question 8

Residuals

Answer 8

Leftovers

Question 9

Emissions

Answer 9

Pollution, residuals

Question 10

Pollutant

Answer 10

reduces ambient quality

Question 11

Recycling

Answer 11

Returning something to the production process

Reusing

Question 12

Damages

Answer 12

Negative impact – reduction in utility or surplus

Question 13

Effluent

Answer 13

Byproduct

Question 14

Cumulative vs. Non-cumulative

Answer 14

Mercury vs. CO2

Question 15

Point source vs. Non-point source

Answer 15

Coal fired electric generator vs. a car

Question 16

Local vs. Regional vs. Global

Answer 16

Sound vs. nuclear reactor leak vs. CO2

Question 17

Continuous vs. Episodic

Answer 17

NOx vs. Bhopal India Methyl isocyanate (pesticide)

Question 18

Environmental Kuznit’s Curve

Answer 18

Poor countries have a very clean environment because they cannot afford/don’t have resources to damage –> Middle countries have a lot of pollution –> Wealthy countries have very clean environment because they no longer want to live in dirty conditions & can afford to clean it up.

Question 19

Horizontal summing used for…

Answer 19

Private goods

Question 20

Vertical summing used for…

Answer 20

Public goods

Question 21

Opportunity costs

Answer 21

What you give up to get something

Question 22

Equimarginal principle

Answer 22

Marginal cost per unit for each firm

Question 23

Efficiency always = equity?

Answer 23

NO!

Question 24

Public good

Answer 24

Non-rival- use by one person does not reduce availability to others
Non-excludable- anyone/everyone can use
Ex. National parks

Question 25

Private good

Answer 25

Ex. Nutella

Question 26

Marginal damages

Answer 26

Damage caused by each additional unit of pollution

Question 27

Marginal benefit

Answer 27

Happiness resulting from each less additional unit of pollution

Question 28

Marginal willingness to pay

Answer 28

How much you are willing to pay to reduce each unit of pollution

Question 29

Environmental Impact Analysis

Answer 29

• A description of the environmental impact of the proposed action
• Any adverse environmental effects that cannot be avoided should the proposal be implemented
• Alternatives to the proposed action
• The relationship between short-term uses of human’s environment and the maintenance and enhancement of long-term productivity
• Any irreversible and irretrievable commitments of resources that would be involved in the proposed action should it be implemented

Question 30

Economic Impact Analysis

Answer 30

Employment
Real incomes
GDP
Rates of inflation
Trade balances

Question 31

Cost effectiveness Analysis

Answer 31

Assume a certain outcome– What is the best way to get to that outcome
Used in Public policy

Question 32

Damage assessment

Answer 32

Estimate the value of the damages to an injured resource

Department of Interior determines damages

Equal or lesser value of– Lost value of the resource or Value of restoring the resource

Problems:
What was the baseline?
How do you restore?
What is the natural environment?

Question 33

Cost Benefit Analysis

Answer 33

Marginal Social Benefit >=Marginal Social Cost

Steps:

1. Decide on a perspective
2. Specify the project
3. Measure inputs and outputs
4. Value inputs and outputs
5. Compare benefits and costs

What is the scope of the project?

With/Without principle–Compare the state of the world with/without the program, don’t discount what will happen without the program

Question 34

Net Present Value

Answer 34

FV/(1+r)^t