lecture 3

Question 1

what are the benefits of economic growth?

Answer 1

1. living standards
2. life style - new products and production processes created by technical advances transform our way of living
3. income redistribution - income growth means that it is much easier to be generous to the poorer members of a society without increasing taxes on the wealthy

Question 2

what are 5 potential costs of economic growth?

Answer 2

1. opportunity costs
2. personal and social costs
3. time distribution of costs
4. negative externalities
5. growth and happiness

Question 3

what is an opportunity cost?

Answer 3

cost of the next best forgone alternative

Question 4

what is a personal cost?

Answer 4

when an economy grows some peoples skills become obsolete due to innovation

Question 5

what is time distribution?

Answer 5

costs of future growth are taken today whereas the benefit will be for the next generation

Question 6

what is geographical distribution?

Answer 6

there are often regional and national losers and gainers from economic growth

Question 7

what is sustainable development?

Answer 7

development that meets the needs of the present without compromising the ability of future generations to meet their own needs

Question 8

what 2 concepts are part of sustainable development?

Answer 8

1. the concept of “needs” in particular, the essential needs of the world’s poor should be given priority to
2. the idea of limitations imposed by the state of technology to stop the environment deteriorating