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Questions and Answers

What is one characteristic of a closed economy?

  • Includes foreign investment
  • Exports and imports freely
  • Engages in international trade
  • Has no outside economic activities (correct)
  • In an open economy, what does the GDP formula include that is not present in a closed economy?

  • Exports (correct)
  • Government expenditures
  • Consumption
  • Household contributions
  • What defines the components of Gross Domestic Product (GDP) in both closed and open economies?

  • C + I + G + net savings
  • C + I + G (correct)
  • C + I + G + foreign loans
  • C + I + G + (X-M)
  • Based on the provided data, how does the Philippines' trade balance reflect its economic status?

    <p>The Philippines is a net importer with a trade deficit</p> Signup and view all the answers

    Which actors are included in both closed and open economic systems?

    <p>Households, firms, and government</p> Signup and view all the answers

    What does a trade deficit indicate about a country's economic activities?

    <p>The country imports more than it exports</p> Signup and view all the answers

    What does the term 'Rest of the World (ROW)' refer to in economic discussions?

    <p>All foreign countries and economies</p> Signup and view all the answers

    In the concept of supply and demand, what does a price above equilibrium indicate?

    <p>A surplus of goods</p> Signup and view all the answers

    What is the primary focus of environmental economics?

    <p>Integrating environmental considerations into economic analysis</p> Signup and view all the answers

    Which of the following best describes the term 'economy' within the context of this course?

    <p>A complex network of production, consumption, and resource distribution</p> Signup and view all the answers

    Which statement about environmental economics is true?

    <p>It examines the relationship between economic policies and environmental outcomes.</p> Signup and view all the answers

    How does environmental economics address market failure?

    <p>By recommending government intervention to correct environmental discrepancies</p> Signup and view all the answers

    Which concept is foundational to understanding environmental economics?

    <p>The impact of human activities on the global ecosystem</p> Signup and view all the answers

    What aspect of economics does this course emphasize?

    <p>The interplay between economic systems and environmental sustainability</p> Signup and view all the answers

    Which of the following is a goal of studying environmental economics?

    <p>To develop policies that mitigate environmental damage while supporting economic growth</p> Signup and view all the answers

    What does the term 'sustainable development' imply in the context of environmental economics?

    <p>Finding ways to meet present needs without compromising future generations' ability to meet theirs</p> Signup and view all the answers

    What is the primary focus of environmental economics?

    <p>Examining the effects of environmental policies and resource management</p> Signup and view all the answers

    How does environmental economics differ from traditional economics?

    <p>It includes the analysis of financial impacts of environmental policies</p> Signup and view all the answers

    Which of the following is NOT a function of environmental economics?

    <p>Evaluating governmental regulations pertaining to health</p> Signup and view all the answers

    In the context of environmental economics, externalities refer to:

    <p>Unintended consequences of market activities on third parties</p> Signup and view all the answers

    What role does valuation play in environmental economics?

    <p>It helps quantify the benefits and costs of environmental services</p> Signup and view all the answers

    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.

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