EER 1000 Midterm 2 Exam Study Guide.
Economics - answercollection of all human interactions involcing the exchange of goods and
services
environmental economics - answerattempts to account for environment in relation to pros and
cons of economic activities
scarcity - answerinability to satisfy...
most resources become more/less cheap over time - answer✔more
market failure - answer✔failure to capture real cost
coal and pollution - answer✔est. $3.5 trillion, plus lost hours of work due to illness and health
care costs
externalities - answer✔actions not accounted for in goods and services (ex: effects of pollution
in coal production + burning)
most common externality - answer✔pollution
common pool resources - answer✔natural or manmade resources that are overused by one
person; preventing others from using it is difficult and costly
Tragedy of the Commons - answer✔issues with individual profit (focused only on big gains);
no benefit for preservation (ex. of market failure). in other words: abuse of resources (by
individuals) that are common to society
what can be done to manage common pool resources - answer✔govt regulations, taxes,
agreements
problems with carbon tax - answer✔supposed to reduce emissions but actually pays to divert
them to other companies. if nothing is being done to get rid of carbon. ex. of greenwashing
greenwashing - answer✔A practice in which companies promote their products as
environmentally friendly when in truth the brand provides little ecological benefit.
4 ways we value the environment - answer✔direct (ex: logging), indirect (ex: mangroves),
option (future potential benefit, ex: plants as medicine), existence (cultural, spiritual, or
otherwise)
what is meant by the cost-benefits of reducing pollution? - answer✔economic savings and
healthier people
EPA - answer✔Environmental Protection Agency; deals with challenges for the future (ex:
coal)
Effects of economic growth - answer✔needed for education, improved sanitation, access to
health care and medicine - improves human welfare. long-term implications such as pollution.
GDP - answer✔Gross Domestic Product: the total value of goods produced and services
provided in a country over a specific time period
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