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Questions and Answers
What is one characteristic of a closed economy?
In an open economy, what does the GDP formula include that is not present in a closed economy?
What defines the components of Gross Domestic Product (GDP) in both closed and open economies?
Based on the provided data, how does the Philippines' trade balance reflect its economic status?
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Which actors are included in both closed and open economic systems?
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What does a trade deficit indicate about a country's economic activities?
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What does the term 'Rest of the World (ROW)' refer to in economic discussions?
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In the concept of supply and demand, what does a price above equilibrium indicate?
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What is the primary focus of environmental economics?
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Which of the following best describes the term 'economy' within the context of this course?
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Which statement about environmental economics is true?
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How does environmental economics address market failure?
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Which concept is foundational to understanding environmental economics?
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What aspect of economics does this course emphasize?
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Which of the following is a goal of studying environmental economics?
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What does the term 'sustainable development' imply in the context of environmental economics?
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What is the primary focus of environmental economics?
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How does environmental economics differ from traditional economics?
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Which of the following is NOT a function of environmental economics?
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In the context of environmental economics, externalities refer to:
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What role does valuation play in environmental economics?
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Study Notes
Introduction to Environmental Economics
- Set to cover fundamental concepts of Environmental Economics for the academic year 2024-2025.
- Instructor: Casper Boongaling Agaton.
Key Learning Objectives
- Gain an understanding of basic economic principles.
- Explore the evolution of Environmental Economics as an essential field.
Understanding the Economy
- Defined as a network of interconnected activities involving production, distribution, and consumption of goods and services, referred to as an "economic system."
- Main actors in the economy: Households, Firms, Government, and the Rest of the World (ROW).
Closed vs. Open Economy
Closed Economy
- Engages solely within itself without external economic interactions.
- No imports, exports, or capital flows; consists only of households, firms, and government.
- The Gross Domestic Product (GDP) is expressed as: GDP = C + I + G (Consumption + Investment + Government Expenditures).
Open Economy
- Interacts freely with the ROW, engaging in the exchange of goods, services, and capital assets globally.
- Includes households, firms, government, and the ROW.
- GDP equation: GDP = C + I + G + (X - M) (where X = exports, M = imports).
Trade Dynamics of the Philippines
- The Philippines operates as an open economy.
- Current trade status: Total exports of 73.5B USD versus total imports of 125.9B USD, resulting in a negative trade balance of -52.4B USD (PSA, 2023).
Major Exports and Imports of the Philippines
- Student exploration of key commodities and goods exchanged internationally.
Economics of Demand and Supply
- Supply curve represents producers while the demand curve reflects consumers.
- Equilibrium point where supply meets demand: P*.
- Surplus occurs when prices exceed equilibrium (P2), while shortage occurs when prices fall below equilibrium (P1).
Environmental Economics Overview
- Environmental economics examines externalities and their impact on market behavior.
- The adjusted supply and demand curves account for external factors, leading to new equilibrium points.
Difference Between Economics and Environmental Economics
- Economics focuses on the allocation and management of scarce resources, production, consumption, and market functionality.
- Environmental Economics applies these economic principles to the sustainable management and analysis of natural resources and environmental policies.
Economic Functions of the Environment
- Environment regarded as a resource supplier and a waste assimilator.
- Essential for analyzing how environmental and natural resources are utilized and managed within economic frameworks.
Importance of Valuation in Environmental Economics
- Valuation and understanding externalities are fundamental for crafting regulations and policies that affect environmental management.
- Supports governments in designing efficient environmental policies and evaluating existing frameworks.
Regulations in Environmental Economics
- The role of regulations in guiding economic activities towards sustainable practices and mitigating adverse environmental impacts.
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Description
This quiz covers the fundamental concepts of Environmental Economics as introduced in the academic year 2024-2025. It examines the basic economic principles, the evolution of the field, and the characteristics of closed and open economies. Enhance your understanding of how different economic systems interact and function.
