Introduction to Environmental Economics Essay example

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Name: Panther ID: ECP 3302 (Online), Summer 2011 Introduction to Environmental Economics Quiz 2 (Due June 22) Instructions: Write your name and panther id on top and fill out the blanks with appropriate word/words based on your readings from corresponding chapters and turn it in the drop-box in Blackboard. The total points in this quiz are 50, each question is worth of 2 points. Chapter 6 1. “Providing the typical person alive in the future with a standard of living, including both material and environmental welfare, at least as high as that enjoyed by the typical person today” is one way to define sustainability. 2. GDP is a poor measure of sustainability because it: 1) fails to include the values of nonmarket production 2)…show more content…
1 Chapter 8 10. The three categories of values from environmental protection are: 1) use value 2) option value 3) existence value The sum of these three categories equals the total value of an environmental resource. 11. We can measure the benefits of environmental improvement by determining people’s maximum willingness-to-pay (WTP) for such improvements or by determing people’s minimum willingness-to-accept (WTA) compensation in exchange for a degradation in environmental quality. 12. Prospect theory states that people may adopt the status quo as their reference point and demand higher compensation to allow environmental degradation than they are willing to pay for making improvements. 13. Economists know that people in general are risk-averse, meaning they dislike risky situations. 14. The travel-cost method estimates a demand curve for a non-market good based on the amount of money that people spend to use the resource. Chapter 9 15. The Porter Hypothesis argues that regulation, while imposing short-run costs on firms, often enhances their long-run competitiveness. 16. Two reasons environmental regulation has not caused firms to move to “pollution havens” are: 1) avoidable pollution control costs are a small portion of total business costs 2) costs are only one factor influencing business location decisions 17. The “double-dividend” hypothesis argues

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