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ESP 162 > ESP 162 Midterm 1 > Flashcards

ESP 162 Midterm 1 Flashcards

1
Q

Policy

A

Process of accessing and deciding among alternatives in public choices based on usefullness.

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2
Q

Analysis

A

Breaking up of complex whole in components to determine its essential feature.

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3
Q

Policy analysis

A

Evaluation and study of formulation, adoption, and implementation of principle or course of action

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4
Q

Economics

A

Study of how society allocates scarce resources.

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5
Q

Environmental economics

A

Appplication of economic principles to study how scarce environmental resources are (descriptive) and should be (prescriptive) managed

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6
Q

Resource economics

A

Study of how society allocated scarce natural resources

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7
Q

Economic rationality

A

Economic agents are optimizers who make choices to max own payoff

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8
Q

Economic incentives

A

Forces in economic world that attract or repel people causing them to change their behavior in some way (in production or consumption) without inncentives cause decider to “feel” true cost of actions, few volutarily pay for them

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9
Q

Opportunity Cost

A

What you give up by doing one other thing instead of another. Ex. Study over play games

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10
Q

Scarcity

A

If offered at no cost, more people would want it than available

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11
Q

Trade-off

A

Situation when something must be given up obtaining something valued

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12
Q

Externality

A

Actions of one individual have a direct, unintended and uncompensated effect on the well being of other individuals

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13
Q

Deontological Ethics

A

Action judged by its intrinsic rightness; it is our duty or moral obligation

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14
Q

Teleological Ethics

A

Worth of action is determined by degree of instrumental value in meeting goal

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15
Q

Utilitarian Ethics

A

Net change in utility is positive (max net benefits)

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16
Q

Pareto Efficiency

A

Economy has resources and goods allocated to max level of efficiency no change made without someone worse off.

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17
Q

Kaldor-Hickd Efficiency

A

Outcome in which aggregate net benefits are maximized; winners compensate for losers losses. May be winners and losers.

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18
Q

Demand/Marginal benefit/marginal willingness to pay

A

Max Willingness to pay for one unit increase in quantity of good.

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19
Q

Elasticity

A

How much demand or cost curves respond to changes concerning variable such as price or state of economy ex gas vs luxry cars. (Volitilty)

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20
Q

Total benefits/total willingness to pay

A

Total max willingness to pay for some quantity of good. It is the area under MB

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21
Q

Supply/Marginal Cost/Marginal willness to accept

A

Change in total cost when quantity is increased or decreased by a unit

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22
Q

Total cost

A

Total cost of supplying some number of units of a good. Area under MC.

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23
Q

Marginal Net benefits

A

Difference in marginal benefits and marginal cost. MB-MC

24
Q

Total Net Benefits/Surplus

A

Difference between total benefits and total cost. TB-TC

25
Q

Aggregate Net Benefits

A

Summing individual values to find aggregate’s horizontally for a private good or vertically for public.

26
Q

Equimarginal rule

A

Efficient level of abatement occurs where MB=MC

27
Q

Market

A

Decentralized collection of buyers and sellers who determine the allocation of goods through exchange

28
Q

Market Equilibrium

A

When quantity and price are the same. Supply=Demand

29
Q

Rational choice

A

Behavior consistent with the values and objectives of decision makers given the available information.

30
Q

First Theorem of Welfare Economics (FTWE)

A

Market results in efficient resource allocation when:

  • no externalities
  • agents are informed
  • markets are competitive (no monopolies)
31
Q

Market failure

A

Allocation of goods and services by market is inefficient.

32
Q

Open Access Resource (OAR)

A

Common pool resource that is non-excludable and rival (can be used up ex. Fish)

33
Q

Non-excludable

A

Open to uncontrolled access by users (absence of property rights)

34
Q

Excludable

A

Closed to uncontrollable access by users (private property rights)

35
Q

Rival

A

One’s consumption diminishes the amount available to be consumed by others

36
Q

Non-rival

A

One’s consumption does not diminish amount available to be consumed.

37
Q

Pure Public good (vs. private, oar, and club)

A

A resource that is non-excludable and non-rivalarous.

38
Q

Nash Equilibrium

A

Occurs whenever each players’ strategy is best response to the other’s.

39
Q

Benefit-cost analysis

A

Estimating net benefits of particular action by estimating costs and benefits often with goal of comparing multiple alternatives

40
Q

Benefit-cost ratio

A

Only tells you if policy has net benefits; misleading. Does not tell the magnitude of benefits.

41
Q

Expected Value

A

Value used when there is uncertainty. Fore discrete random variable formula is probabilty x weight summed

42
Q

Discounting/Discount rate

A

Method of placing weights on future values to convert them into net present values

43
Q

Willingness to pay vs. willingness to accept

A

WTP: max money and individual would pay to attain something.
WTA: Minimum compensation tolerated for loss of something.

44
Q

Use vs non-use value

A

Use: physically experience or consuming an emvironmental good
Non-use: benefit or pleasure from knowledge that environental good exists without using it. Ex. Existence value (passive use)

45
Q

Existence Value

A

Non-use altruistic value from preserving.

Ex. Grand canyon, antartica

46
Q

Contingent Valuation

A

Directly asks subjects via survey about WTP or WTA (stated preference)

47
Q

Revealed Preference Methods

A

Use of market information or behavior to estimate value of good not directly traded in a market. (Use value only)

48
Q

Hedonic Pricing

A

Price of something related to multiple characteristics you can look at differences in prices to assess value of one of those characteristics. Ex. Valuing open space and using real estate prices

49
Q

Value of statistical life

A

Use hedonic wage method to estimate value of increased risk of on job mortality. ( riskier job higher salary)

50
Q

Averting Cost

A

Revealed preference: looks at willingness to pay to reduce risk or impact of something bad

51
Q

Travel Cost

A

Revealed preference: estimating value of amenity by treating the costs incurred to experience it as its price.

52
Q

Abatement vs Compliance cost

A

Abatement: out of pocket cost for abatement equipment

Compliance Cost: cost of all policy compliance actions includes abatement cost in cost. Ex: process change

53
Q

Secondary effects

A

Outcomes of policy that extend beyond primary market being regulated

54
Q

Progressive vs. regressive

A

Progressive: growth for poor incrs wages from bottom. Favor poor
Regressive: greater impact on poor ex. Gas prices favor rich

55
Q

Regression analysis

A

Able to quantify relationships between a dependent variable with independent variable. Ex. See if there is a connect on how much you eating and how much you weigh

56
Q

Partial Equilibrium/Behavioral response vs General Equilibrium/Secondary Effects

A

Partial Equilibrium: captures behavioral responses, but holds prices constant, limited to burden on directly regulated entities. Ex. Incrs MC for a firm or household
General Equilibrium: Net burden once all good and factor markets have equilibrated.

ESP 162 (2 decks)

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