Preface and Chapter 1

Question 1

Environmental Economics

Answer 1

focuses on all the difference facets of the connection between environmental quality and the economic behavior of individuals and groups of people. “how the economic system shapes economic incentives in ways that lead to environmental degradation and improvements.

Question 2

Economics

Answer 2

The study of how and why individuals and groups make decisions about the use and distribution of valuable human and nonhuman resources. Divided into microeconomics and macroeconomics.

Question 3

Environmental Economics

Answer 3

the application of the principles of economics to the study of how environmental resources are managed. Focuses on a society’s natural and environmental resources and examines the way people make decisions that lead to environmental destruction and improvements. It is an analytical subject.

Question 4

Microeconomics

Answer 4

The study of the behavior of individuals and small groups

Question 5

Macroeconomics

Answer 5

the study of the economic performance of economies as a whole

Question 6

Analytical Models

Answer 6

A model that is a simplified representation of reality in the sense that it isolates and focuses on the most important elements of a situation and neglects the others.

Question 7

Positive Economies

Answer 7

the study of what is. Seeks to understand how an economic system actually operates by looking at the way people make decisions in different types of circumstances.

Question 8

Normative Economies

Answer 8

the study of what ought to be

Question 9

Economic Incentive

Answer 9

is something in the economic world that leads people to channel their efforts at economic production and consumption in certain directions

Question 10

Conventional “command-and-control” policies

Answer 10

Relies on laws and regulations that directly or indirectly specify pollution-control technologies or practices that polluters should use.

Question 11

Perverse Incentives

Answer 11

incentives created by a policy that actually work against the overall objectives of that policy.

Question 12

Question of Macroeconomics

Answer 12

1) hat overall preferences do citizens have with respect to the balance between environmental protection and economic growth?
2) Historically, have measures to protect the environment led to lower economic growth rates?
3) How might environmental regulations be designed to minimize their impacts on growth?
4) When the perspective is broadened from gorwth to human welfare, how do environmental protection measures stack up?

Question 13

Cost-Benefit Analysis

Answer 13

the benefits of some proposed action are estimated and compared with the total costs that society would bear if that action were undertaken.

Question 14

Globalization

Answer 14

the perceived changes that are taking place in the world economy, including the rapid growth of trade, privatization of economic institutions, massive international flows of financial capital and growth in the numbers and sizes of multinational firms.