Economics and Environment Quiz
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Questions and Answers

Which of the following is NOT assumed in the rationality intervention model?

  • Goals are known
  • Alternatives are unknown (correct)
  • Values are known
  • Information to assess alternatives is known

    • Public organizations face fewer challenges in ensuring accountability and transparency than private organizations.

    False

    What is the primary advantage of incremental decision-making models in government?

    Creates political support

    According to Simon, rationality is __________ due to cognitive and information limits.

    <p>bounded</p> Signup and view all the answers

    Match the critique of the rational model with its dimension:

    <p>Humans cannot always be rational = View of human reason Information is often limited = Understanding of knowledge acquisition Theory and practice are not always aligned = Connection between theory and practice</p> Signup and view all the answers

    Which of the following is NOT an economic function of the environment?

    <p>Creates economic inequality</p> Signup and view all the answers

    Environmental externalities are reflected in market prices.

    <p>False</p> Signup and view all the answers

    What are the two primary factors driving consumption?

    <p>Population and per capita consumption</p> Signup and view all the answers

    The process of transforming waste into useful products is known as __________.

    <p>recycling</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Exclusivity = Ability to exclude others from a good Rivalness in consumption = Consumption that decreases availability for others Marginal revenue = Additional revenue from selling one more unit Pollution tax = Tax levied to reduce pollution by businesses</p> Signup and view all the answers

    Which of the following statements is true regarding private goods?

    <p>They have both exclusivity and rivalry.</p> Signup and view all the answers

    Higher recycling efficiency is a strong argument for the infinite availability of natural resources.

    <p>False</p> Signup and view all the answers

    What is the purpose of implementing a pollution tax?

    <p>To reduce pollution by making it more costly for companies to pollute.</p> Signup and view all the answers

    What is one of the objectives of circular economy (CE) policies?

    <p>Support repairability</p> Signup and view all the answers

    Economic incentives and awareness campaigns are instruments used in the circular economy.

    <p>True</p> Signup and view all the answers

    What skill area involves promoting sustainability values?

    <p>Sustainability Values</p> Signup and view all the answers

    In circular economy, policy instruments are considered _______ as they evolve between their original design and actual application.

    <p>dynamic</p> Signup and view all the answers

    Match the aspect of property with its description:

    <p>Excludable = Can exclude individuals from use based on price or purchase Rivalrous = Means one person's purchase does not prevent another's purchase Ownership = Refers to who controls and holds the rights to a product Funding = Refers to the financial resources allocated for a public good</p> Signup and view all the answers

    Which of the following is a key skill area identified in the GreenComp model?

    <p>Complexity in Sustainability</p> Signup and view all the answers

    Governance intervention is not necessary if the market is functioning properly.

    <p>True</p> Signup and view all the answers

    What are the three connected aspects that influence circular economy policies?

    <p>Ownership, funding, and control</p> Signup and view all the answers

    What is the first step in the policy cycle?

    <p>Agenda setting</p> Signup and view all the answers

    Substantive instruments focus on processes and activities needed to coordinate policy actors.

    <p>False</p> Signup and view all the answers

    What is a demand-pull instrument in the context of Circular Economy (CE)?

    <p>Encouraging market adoption by creating demand for CE solutions.</p> Signup and view all the answers

    Government needs to intervene when there are market __________.

    <p>failures</p> Signup and view all the answers

    Match the policy instruments with their type of coerciveness:

    <p>Sermon = Low degree of coerciveness Carrot = Medium degree of coerciveness Stick = High degree of coerciveness Information-based = Low degree of coerciveness</p> Signup and view all the answers

    Which of the following is not a push factor for Circular Economy?

    <p>Public procurement policies favoring recycled materials</p> Signup and view all the answers

    Which type of goods is allocated efficiently in markets only to those who are willing and able to pay?

    <p>Private goods</p> Signup and view all the answers

    Policies must create both push and pull factors for effective circular economy transition.

    <p>True</p> Signup and view all the answers

    Renewable resources are those that can be used up completely if not managed properly.

    <p>True</p> Signup and view all the answers

    What is the goal of aligning aims, objectives, and instruments in CE policies?

    <p>To ensure coherence.</p> Signup and view all the answers

    Which foundational thinker proposed that Public Policy should address the fundamental problems of man in society?

    <p>Harold Lasswell</p> Signup and view all the answers

    Public Policy involves not just governments but also various __________ and institutions.

    <p>actors</p> Signup and view all the answers

    Match the following terms related to Public Policy with their definitions:

    <p>Outputs = Results of government actions Outcomes = Impacts on society Problem-centered approach = Focus on deep-seated issues Turbulent context = Dynamic environment of decision-making</p> Signup and view all the answers

    What is a characteristic of public goods, as opposed to private goods?

    <p>They are non-excludable and non-rivalrous</p> Signup and view all the answers

    Dye defined Public Policy as 'whatever governments choose to do or not to do.'

    <p>True</p> Signup and view all the answers

    What does Public Policy evaluate regarding government programs?

    <p>Outputs and outcomes</p> Signup and view all the answers

    Study Notes

    Relationship Between Economics and the Environment

    • Traditional economic models involve companies and households.
    • Companies use resources to produce goods and services.
    • Households provide human resources and consume goods.
    • The environment has economic functions:
      • Provides inputs for production.
      • Absorbs waste and transforms it into other products.
      • Is a source of utility.

    Economic Functions of the Environment

    • Environmental externalities are costs or benefits affecting third parties not reflected in market prices.
      • Examples: pollution (air, water, soil), deforestation, climate change, noise pollution.
    • Consumption is driven by population and per capita consumption.
    • Resource productivity is increasing, allowing for the same output with less input.
    • Availability of resources affects resource prices, as do transition costs and time to adjust.
    • Population growth is slowing, but still increasing.

    How Markets Work and Why They Fail

    • Marginal revenue and marginal cost are crucial for market efficiency.
    • Companies will produce less if there are negative externalities.
    • They might compensate consumers by increasing prices if there are pollution tax.
    • Private goods are excludable and rivalrous.

    Renewable and Non-Renewable Resources

    • Renewable resources can regenerate (e.g., forests, fish).
    • Non-renewable resources cannot regenerate (e.g., fossil fuels).
    • Sustainable yield is the maximum harvestable amount of a resource without depleting the stock.

    Sustainable Yield (MSY)

    • Stock growth increases with population, and harvest increases with effort.
    • Higher effort leads to diminishing returns for yield per unit effort.
    • Overfishing and stock depletion is possible above MSY effort levels.
    • Stock is balanced with effort at the MSY point.

    Tragedy of the Commons

    • Individual actions can harm the overall well-being of society.
    • Lack of property rights incentivizes individuals to exploit common resources. Incentive to free-ride.

    Economic Value of Natural Resources

    • Use value includes direct (money) and indirect (recreation).
    • Optional use value includes future personal recreation, and bequest value (future generations).
    • Existence value= biodiversity, and non-use value= preserving for non-use.

    Policy Instruments

    • Governments set policies that translate into local-level actions.
    • Public policy evaluates government actions' effects on society.
    • Policy tools include regulations, incentives, to coordinate actions.
    • Policy instruments are categorized based on their coerciveness to encourage compliance.

    Policy Cycle

    • Agenda setting is the process of identifying problems worthy of policy attention.
    • Policy formulation is the process of developing possible solutions or policies.
    • Policy decision making involves choosing the best policy solution.
    • Implementation is putting the chosen policy into action.
    • Evaluation assesses the effectiveness of the policy's impact.

    Policy Mixes and Decision on Governance Transitions

    • Policy instruments have a hybrid nature, evolving in practice.
    • Governments intervene when markets or governance fail.
    • Interventions use a variety of instruments across various sectors.

    Rationality Interventions

    • Rational models assume that governments’ goals, values, and alternatives are known and rational.
    • In Reality: Goals, values and alternatives for rational intervention are not always known or agreed upon.
    • Rational models do not always consider democratic values.

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    Relationship Between Economics and Environment PDF

    Description

    This quiz explores the intricate relationship between economics and the environment. It covers concepts such as economic functions of the environment, externalities, and market failures. Test your knowledge on how economic activities impact environmental sustainability and vice versa.

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