Podcast
Questions and Answers
What is the environment referred to as in the context of the economy?
What is the environment referred to as in the context of the economy?
- A thermodynamically open system
- A thermodynamically closed system (correct)
- A self-sustaining system
- A self-contained system
What is one of the functions of the environment to the economy?
What is one of the functions of the environment to the economy?
- Regulator of economic activity
- Source of resource inputs (correct)
- Provider of labor services
- Sink for economic outputs
What is the result of production in the economy-environment system?
What is the result of production in the economy-environment system?
- Only consumption of environmental services
- Only addition to the human-made capital stock
- Only provision of amenity services
- Both waste inserted into the environment and addition to the human-made capital stock (correct)
What is the economy located within?
What is the economy located within?
What is involved in the economy-environment system?
What is involved in the economy-environment system?
What is the environment referred to as in terms of matter?
What is the environment referred to as in terms of matter?
What are the environmental functions that interact with one another?
What are the environmental functions that interact with one another?
What is a possibility in the economy-environment system?
What is a possibility in the economy-environment system?
What is the Environmental Kuznets Curve (EKC) similar to in terms of its pattern?
What is the Environmental Kuznets Curve (EKC) similar to in terms of its pattern?
According to the World Development Report 1992, what is the assumption behind the view that greater economic activity hurts the environment?
According to the World Development Report 1992, what is the assumption behind the view that greater economic activity hurts the environment?
What is the equation that represents the view that per capita emissions increase linearly with per capita income?
What is the equation that represents the view that per capita emissions increase linearly with per capita income?
Which of the following countries are likely to be on the left-hand curve of the EKC?
Which of the following countries are likely to be on the left-hand curve of the EKC?
What is a limitation of the EKC hypothesis?
What is a limitation of the EKC hypothesis?
What is a criticism of the EKC hypothesis?
What is a criticism of the EKC hypothesis?
What is an alternative explanation for reductions in pollutants?
What is an alternative explanation for reductions in pollutants?
What is a potential consequence of the EKC hypothesis for countries like China, India, and many countries in Latin America and Africa?
What is a potential consequence of the EKC hypothesis for countries like China, India, and many countries in Latin America and Africa?
What is the primary distinction between stock resources and flow resources?
What is the primary distinction between stock resources and flow resources?
What is the main difference between the traditional economic system and resource economics?
What is the main difference between the traditional economic system and resource economics?
What is the primary goal of moving towards a more sustainable society?
What is the primary goal of moving towards a more sustainable society?
What is the primary consequence of poverty?
What is the primary consequence of poverty?
What is the role of Mi in the environmental economics production function?
What is the role of Mi in the environmental economics production function?
What is the primary characteristic of the environmental economics production function?
What is the primary characteristic of the environmental economics production function?
What is the primary difference between the traditional economic system and environmental economics?
What is the primary difference between the traditional economic system and environmental economics?
What is the primary goal of environmental policy?
What is the primary goal of environmental policy?
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Study Notes
Economy and Environment
- Economic activity takes place within the environment and is part of the earth's system, which receives inputs of solar radiation.
- The economy involves production and consumption, which draw upon environmental services, and production gives rise to wastes inserted into the environment.
Environmental Functions
- The environment provides four functions to the economy:
- Source of resource inputs
- Source of amenity services
- Receptacle for wastes
- Provides life support services
- These environmental functions interact with each other in various ways and may be mutually exclusive.
Substitutability of Natural and Reproducible Capital
- There exist possibilities to substitute reproducible capital for 'natural capital'.
Environmental Kuznets Curve (EKC)
- The EKC is an inverted-U relationship between pollution concentrations and per capita real GDP.
- The EKC hypothesis states that pollution initially increases with economic development, but eventually decreases as income rises.
- Not all pollutants follow the EKC pattern, and some scholars argue that the EKC relationship is not a general metaphor for the relationship between income and sustainability.
Resource Economics
- Resources can be classified into stock resources and flow resources.
- The difference between the two lies in whether the level of current use affects future availability.
Production Function Specifications
- Microeconomics classical production function: Qi = fi (Li, Ki)
- Resource economics production function: Qi = fi (Li, Ki, Ri)
- Environmental economics production function: Qi = fi (Li, Ki, Mi)
- Extended environmental economics production function: Qi = fi (Li, Ki, Mi, A) with ambient pollution
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