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Environmental
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, Environmental Economics_ Key Concepts and Policy Tools for Efficiency and Valuation.pdf Environmental Economics_ Key Concepts and Policy Tools for Efficiency and Valuation.pdf Environmental Economics_ Key Concepts and Policy Tools for Efficiency and Valuation.pdf
5/27/26, 1:34 PM Environmental Economics: Key Concepts and Policy Tools for Efficiency and Valuation Flashcards | Quizlet
Positive analysis what IS happening, using facts and logic to reach conclusions (ex. What effect do
MPAs have on fish stocks?)
normative analysis what should be happening, applies a set of norms/values to reach conclusions
Economic efficiency minimizing wasted effort or resources, in policy terms, maximizing net benefits
NB(Q)+TB(Q)-TC(Q), the efficient quantity Q* is where MM=MC
Equimarginal principle (MC=MB) net benefits are maximized where marginal benefit equals marginal cost, for
pollution abatement, this is Q*
Opportunity cost what you give up by doing one thing and not the other, the forgone benefit of the
next-best alternative
WTP the maximum amount a person is just barely willing to pay for something: the basis
for measuring benefits, used for gains
WTA the minimum compensation a person requires to give something up, the natural
measure for losses, WTA>WTP, the gap widens as the stakes rise
Greatest net benefit the efficient choice, pick the option where benefits most greatly exceed the cost
https://quizlet.com/1176529921/environmental-economics-key-concepts-and-policy-tools-for-efficiency-and-valuation-flash-cards/
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