Week 1 Flashcards
Economics def:
The science of choice
What does greens vs browns mean?
That the argument is either or for green= enviro sustainability, brown= oil and resources.
Econ shows the gray area
Tradeoffs meaning
There is a tradeoff between market good and environmental quality. If one goes up the other goes down however there is a sweet spot with max efficiency called the production possibilities frontier, PPF line.
What is production possibilities frontier? (PPF line)
It is where society is the most efficient (using all sources) on the market good (y axis) and environmental quality (x axis) graph.
What happens to PPF graph line if affected by extraction over time?
The curved line will move towards the origin (left) because both the market goods and environmental quality will decrease in possibilities.
What happens to PPF graph line if affected by technological change?
The curved line will move further away from the origin (right) because both the market goods and environmental quality will increase in possibilities.
At what point on the PPF line have the most efficiency?
At the 45 degree mark on the curved PPF line.
Describe the cycle between the economy and ecosystem? What goes from what to the other?
Economy -> (Emissions and Waste) -> Ecosystem
Ecosystem -> (Natural Resources Extractions) -> Economy
Environmental Services and Amenities -> Economy
(but doesn’t take away from the ecosystem)
describe Co-Evolution (humans / environment)
Humans will adapt to changes in the environment (igloos) and the environment will adapt to human activity (invasive species survival)
describe Co-evolution (political and economic systems / environment)
Economic/ Political system affects environment through extractions
Environment affects economic/political system through resource availability and environmental quality
Opportunity cost def:
“Opportunity cost is all the alternative uses for a resource that are forgone once an allocation decision is made this includes financial and non-financial costs”
ex: beach day vs. attending lecture: your time is an opportunity cost bc: -Missed quiz -Missed attendance
Cost of going to the beach example explained:
Cost: -gas -food -parking Opportunity cost of your time: -Missed quiz -Missed attendance -Missed the chance to learn
How does societies decide which point of the PPF they should be and how do they move from one point to another?
How they move from one point to another: Policy Intervention
describe two types of policy interventions:
Incentive based:
- Rely in market instruments
- Generally more efficient
- Require less enforcement
Command and Control:
- Relies on heavy supervision and enforcement
- Does not take into account individual marginal costs and benefits
- Generally very inefficient
Why is Economics relevant in Environmental decisions?
Economics is the quantitative study of resource allocation
“Resource” = any productive input
ex: Labor, Financial assets, Technologies, Raw materials, Environmental services
“Allocation” implies that there are competing uses
ex: -The resource is scarce
- Abundant resources are not infinite
