Intro

Question 1

What economics

Answer 1

The allocation of scarce resources

Question 2

What do economists often use and why

Answer 2

models for theoretical consistency and to simplify complexity, highlight key interactions and facilitate empirical investigations

Question 3

What is opportunity cost`

Answer 3

the cost of the next best alternative we forgo for the one we choose

Question 4

In general what to prices reflect and why is that an issue to EE

Answer 4

prices reflect the relative scarcity of goods

However, in environmental economics, markets, and thus prices, often do not exist.

Question 5

What are the 4 different types of good

Answer 5

private, common, club, public

Question 6

example of club goods

Answer 6

cinema, private park, game reserve

Question 7

What makes the env different to normal economics

Answer 7

Often includes market failures
Unique dynamics - resource use today affects resource use tomorrow
Ireversibility - damage can cause long term effects
Linkages between economic and ecological systems

Question 8

What is the bruntland definition of sustainability

Answer 8

Meets needs of present generation

Does not compromise the ability of future generation to meet their own needs

Question 9

Describe the env Kuznts curve

Answer 9

Inverted U shape relationship between env damage and per capita income

Question 10

What was simon kuznet interested in

Answer 10

Trade-off between environmental quality and development

Question 11

Describe weak sustainability

Answer 11

Assumes sustainability between natural capital and manufactured reproducible capital
Depletion of critical natural capital can be offset by the creation new natural capital with technology
cost-benefit principle

Question 12

Describe strong sustainability

Answer 12

Natural systems should not be depleted
No substitution between manufactured reproducible capital and natural
Based on ecological principles
Precautionary principle

Question 13

What are the benefits of polluter pays

Answer 13

Incorporate environment into decision-making
Stop subsidising polluting sectors (e.g. mining)
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Question 14

What is the objective of polluter pays

Answer 14

Cost’ pollution to prevent and control rational use of resources.
Avoid distortion in international trade and market
Polluter (polluting activity) bears the responsibility and costs (covering liability)

Question 15

Why is it important to place a value on env protection

Answer 15

In order to make decisions at the margin ie equating marginal costs and marginal benefits

Question 16

What equity issues do we need to consider

Answer 16

Efficiency does not necessarily = equity
the distribution of resources and externalities, are also important.
Policymakers need to consider how various groups will be impacted.

Question 17

What are the key concept differences between weak and strong sus

Answer 17

weak = optimal allocation of scare resources

Question 18

What is positive economics

Answer 18

studies how the economy actually functions. It is purely descriptive.

Question 19

what is normative ecomics

Answer 19

the study of whether or not the economy produces socially desirable results. It requires value judgments

Question 20

Types of intervention in env economics

Answer 20

Create a market
regulation (and enforcement)
voluntary actions