Economics and Environment Quiz
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Questions and Answers

Which of the following assumptions are made in rationality intervention?

  • Alternatives are known (correct)
  • Analysis time is irrelevant
  • Values are unknown
  • Goals are ambiguous

    • Incremental models in decision making prioritize small steps and might change goals.

    True (A)

    What is the main critique against the rational model of decision making?

    Humans cannot always be rational due to biases and emotions.

    Public organizations must act in observance to democratic __________.

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

    Match the following decision-making models with their descriptions:

    <p>Rational model = Focuses on efficiency and means Incremental model = Small step approach with potential for changing goals Bounded rationality = Decision makers strive to satisfice Public values = Emphasizes fairness and humanity</p> Signup and view all the answers

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

    <p>Increases company profits directly (D)</p> Signup and view all the answers

    Environmental externalities refer to costs or benefits that are included in market prices.

    <p>False (B)</p> Signup and view all the answers

    What economic measure can be implemented to encourage companies to reduce pollution?

    <p>Pollution tax</p> Signup and view all the answers

    A good that has both exclusivity and rivalry is classified as a ______ good.

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

    Match the following environmental issues with their types:

    <p>Pollution = Externality Deforestation = Resource depletion Climate change = Global impact Noise pollution = Local impact</p> Signup and view all the answers

    What drives consumption in an economy?

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

    Resource productivity is increasing, meaning the same output can be produced using shorter amounts of input.

    <p>False (B)</p> Signup and view all the answers

    What is the term for the additional revenue for selling one more product?

    <p>Marginal revenue</p> Signup and view all the answers

    What is a key characteristic of private goods?

    <p>Their consumption by one individual excludes others. (C)</p> Signup and view all the answers

    Public goods, such as clean air, are both excludable and rival.

    <p>False (B)</p> Signup and view all the answers

    What type of resources are managed carefully to avoid depletion?

    <p>Renewable resources</p> Signup and view all the answers

    Public Policy emphasizes the evaluation of the results (outputs) of government actions, such as laws and __________.

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

    Match the following thinkers with their contributions to Public Policy:

    <p>Harold Lasswell = Fundamental problems of man in society Dye = Government-centric definition of Public Policy Lasswell's approach = Problem-centered approach Modern perspectives = Include various actors in decision-making</p> Signup and view all the answers

    Which of the following best defines Public Policy according to Dye (1972)?

    <p>Whatever governments choose to do or not to do. (B)</p> Signup and view all the answers

    Public Policy is only influenced by governmental decisions.

    <p>False (B)</p> Signup and view all the answers

    Which skill area involves understanding and promoting the importance of sustainability?

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

    Modern Public Policy is shaped by a __________ context where societal actors interact.

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

    Economic incentives and regulations are considered instruments for effective Circular Economy policies.

    <p>True (A)</p> Signup and view all the answers

    What is one of the reasons governments intervene in the market?

    <p>Market or governance failures</p> Signup and view all the answers

    The skill area that focuses on practical abilities to implement policies is called ___.

    <p>Acting for Sustainability</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Excludable = Can prevent others from using it based on price Rivalrous = If one person uses it, it reduces availability for others Polyarchic Control = Governmental control over resources Institutional Processes = Dynamic evolution of policy instruments</p> Signup and view all the answers

    Which of these actions is NOT an objective of Circular Economy policies?

    <p>Promote single-use products (D)</p> Signup and view all the answers

    The policy instruments in Circular Economy are static and do not evolve over time.

    <p>False (B)</p> Signup and view all the answers

    What is the significance of creativity in the context of Circular Economy?

    <p>To imagine and plan for sustainable solutions</p> Signup and view all the answers

    Which phase is NOT part of the policy cycle?

    <p>Policy dissolution (B)</p> Signup and view all the answers

    Government intervention is not necessary in cases of market failures.

    <p>False (B)</p> Signup and view all the answers

    What are the two main types of policy instruments identified?

    <p>Substantive and procedural</p> Signup and view all the answers

    Policies must address _______ and _______ factors to encourage the Circular Economy.

    <p>push, pull</p> Signup and view all the answers

    Match the following components of policy design with their descriptions:

    <p>Aims = Goals to be achieved Objectives = Specified outcomes to work towards Targets = Measurable indicators of success Implementation preferences = Methods chosen for execution</p> Signup and view all the answers

    Which of the following best describes 'pull factors' in policy-making?

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

    The stick, carrot, and sermon approaches classify policy instruments based on their degree of coerciveness.

    <p>True (A)</p> Signup and view all the answers

    List one example of a push factor in the context of Circular Economy policies.

    <p>Government funding for technology development</p> Signup and view all the answers

    Study Notes

    Relationship Between Economics and the Environment

    • Companies use resources to produce goods and services
    • Households provide human resources and consume goods
    • The environment provides inputs for production
    • It absorbs waste and transforms it into other products
    • It's a direct source of utility

    Economic Functions of the Environment

    • Environmental externalities are costs or benefits that affect third parties not reflected in market prices
    • Examples include pollution (air, water, soil), deforestation, climate change, and noise pollution
    • Consumption is driven by population and per capita consumption
    • Resource productivity is increasing which allows for the same output with greater inputs, though new resource discoveries are not a strong argument
    • The price of natural resources depends on availability, requiring adjustments for transition costs
    • Population growth is slowing, yet still increasing

    Maximum Sustainable Yield (MSY)

    • MSY is the largest yield of a renewable resource that can be harvested without depleting the stock
    • It balances the growth rate of a population (e.g., fish) with the harvest rate to ensure regeneration
    • Stock growth increases with larger populations; harvest yield increases with greater effort
    • Beyond a certain point additional effort, yields diminishing returns, and too much effort leads to overfishing and depletion
    • The optimal levels of stock (SMSY) and effort (EMSY ) result in the maximum sustainable yield
    • Carrying capacity (SCC) is reached when resources are near maximum utilization, which reduces growth in the resource

    Tragedy of the Commons

    • Actions of individuals impact the collective well-being of society
    • No individual incentive to internalize the externality - leading to over-exploitation
    • Incentive to free ride, to make individual gains without contributing to collective control

    Economic Value to Natural Resources

    • Use value: Direct (money) and indirect (recreation)
    • Optional value: Future personal recreation, use by future generations
    • Existence value: Biodiversity preservation
    • Non-use value: Intrinsic worth of the resource

    Governance and Policy

    • Potential solutions to environmental issues include privatization, state ownership, and communal management
    • Governments may use policy instruments (like subsidies or taxes) to influence economic behavior, or interventions are needed when there are market failures
    • Environmental policy cycles involve agenda-setting, policy formulation, decision-making, implementation, and evaluation

    Policy Instruments

    • Regulations, subsidies/taxes, and information campaigns can influence behaviors
    • Policy instruments address economic, social, and environmental considerations within a policy cycle
    • Collective action or governance failures happen if actors fail to effectively act for achieving desirable outcomes (from a collective or state perspective)

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    Related Documents

    Relationship Between Economics and Environment PDF

    Description

    Explore the intricate relationship between economics and the environment through this quiz. Assess your understanding of economic functions such as externalities, resource productivity, and sustainable yield. Dive into how environmental factors influence economic activities and vice versa.

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