quiz #1

Question 1

what are the potential outcomes from different monetary developments on the environment?

Answer 1

depending on the nature of the problem, monetary development can lead to:
A: problems decline
B: problems increase then decline
C: problems increase

Question 2

economic activity can be described as the circular flow of money and products. explain how this is.

Answer 2

household provide labour, land and capital to firms (production), firms then provide goods and services to households (consumption). firms pay households for labour (production) and households pay firms for goods and services (consumption).

Question 3

how do ecological economists view economic activity?

Answer 3

the natural environment encompasses the economy, without the environment, the economy doesn’t exist.

Question 4

explain, diagram, an ecological economist’s view of economic activity

Answer 4

source of all power comes from the sun. the environment (source of essential goods and services) surrounds the economy (which is production and consumption). materials go into the economy, wastes leave. recycling can bring it back around. energy goes into the economy, heat energy leaves. heat energy leaves the environment as well.

Question 5

define ecosystem capital

Answer 5

resources from natural ecosystems that provide life & support elements. economic production & consumption must not deplete it.

Question 6

what are the three types of capital?

Answer 6

natural, produced and intangible

Question 7

define produced capital. give examples

Answer 7

goods and services. buildings, roads, savings, power lines. produced capital is the easiest to measure, has clear income-earning potential, and is the major focus of most economic planning.

Question 8

define natural capital. what are the two types?

Answer 8

natural resources/ goods and services provided by natural ecosystems. renewable and nonrenewable natural capital.

Question 9

what is renewable capital (ecosystem capital) used for and how?

Answer 9

provides goods via: forests, fisheries, water. provides services: oxygen production, waste breakdown, climate regulation.

Question 10

what is nonrenewable capital used for and how?

Answer 10

provides nothing unless it’s extracted.

Question 11

what are the three elements of intangible capital?

Answer 11

human, social and knowledge assets

Question 12

explain human capital. give examples

Answer 12

population’s physical, psychological and cultural attributes. talents, education, health

Question 13

explain social capital. give examples. what do they affect?

Answer 13

societal and political environment. government, laws, religion. they affect economic processes

Question 14

explain knowledge assets. give examples

Answer 14

can be transferred to others. education, internet, libraries

Question 15

what are some examples of nations that have potential to improve their capital?

Answer 15

venezuela (oil)

Question 16

what are the problems with measuring wealth by GDP or GNP?

Answer 16

they do not measure true economic progress as they don’t account for environmental loss/societal costs which offsets growth. the measurements omit natural services provided by ecosystems and the problems they occur aren’t included as they’re hard to monetize and it takes a long time to see problems arise. environmental degradation, depletion and pollution all count as an asset…. when you measure an economy without considering the environment… no bueno.

Question 17

what’s the GPI? what are some examples of positive & negative factors?

Answer 17

genuine progress indicator: economic activities that are either positive and sustainable, or not
positive: housework, parenting, volunteering
negative: crime, pollution, resource depletion

Question 18

explain the different policy options.

Answer 18

command and control strategy: sets standards and technologies
market strategy: uses the market to set prices on pollution and resource use

Question 19

what’s the policy life cycle? what are the stages?

Answer 19

the predictable course of policy development in democratic societies
1) recognition
- low in political weight
- early perceptions of a problem
2) formulation
- rapidly increasing political weight
- public is interested
- high media coverage
- the three e’s of environmental policy
– effectiveness: does it accomplish what it intends?
– efficiency: is the objective reached with the least cost?
– equity: is the financial burden shared equally?
3) implementation
- policy is determined
- policy concern and political weight decline
- emphasis on development/enforcement of regulations
4) control
- years pas the recognition stage
- policies are supported
- regulations are streamlined

Question 20

what’s one of the problems with renewable energy?

Answer 20

need base power, open to political vulnerability

Question 21

what does a benefit cost analysis do? If it’s a good analysis, which cost should it include? give an example of an external good and bad.

Answer 21

it examines the need for a proposed regulation. if the benefit outwighs the cost of an action, there is an economic justification for proceeding. if the costs outweight th benefits, the project may be dropped/revised.

it should include all costs and benefits; including external costs, which are the effects of a business process not included in the usual calculations of profit or loss.

external good: not credited in the ledgers, learning that improves worker performance
external good: costs society (pollution)