ECON 2100 FINAL EXAM STUDY GUIDE
• Environmental economics - Answer -the application of the tools of economics to the
topic of environmental and resources issues
• Positive analysis - Answer -descriptive, factual statement
• Normative analysis - Answer -prescriptive, value-based statement to make judgments
about what is "better" or "worse"
• First Law of Thermodynamics - Answer -matter and energy can neither be created nor
destroyed
• Second Law of Thermodynamics - Answer -nature's capacity to convert matter and
energy is limited; during energy conversion, some energy becomes unstable
• Residual - Answer -the amount of a pollutant remaining in the environment after a
natural or technological process has occurred
• Natural pollutant - Answer -arise from nonartificial processes in nature
• Anthropogenic pollutant - Answer -human induced and include all residuals with
consumption and production
• Stationary pollutant - Answer -a fixed-site producer of pollution
• Mobile pollutant - Answer -any nonstationary polluting source
• Point pollutant - Answer -any single identifiable source from which pollutants are
released
• Non-point pollutant - Answer -a source that cannot be identified accurately and
degrades the environment in a diffuse, indirect way over a relatively broad area
• Local pollution - Answer -damage not far from the source
o Ex: urgan smog, solid waste pollution
• Regional pollution - Answer -damage extends well beyond the source
o Ex: acidic deposition, oil spill
• Global pollution - Answer -- involving widespread environmental effects with global
implications
o Ex: global warming, ozone depletion
, 1. Environmental Quality - Answer -- reduction in anthropogenic contamination to
socially acceptable levels
2. Biodiversity - Answer -assuring the variety of distinct species, genetic variability, and
variety of inhabitable ecosystems
3. Sustainable Development - Answer -management of resources to ensure long-term
quality and abundance for future generations
1. Allocative Efficiency - Answer -requires resources to be appropriated such that
additional benefits equal additional costs
2. Cost Effectiveness - Answer -requires that the minimum amount of resources be
used to achieve an objective
3. Environmental Justice - Answer -concern the fairness of the environmental risk
burden across segments of population or geographic region
1. Command and Control approach - Answer -a policy directly regulates polluters
through the use of rules or standards
2. Market Based approach - Answer -an incentive-based policy that encourages
conservation practices or pollution reduction strategies
Materials Balance Model - Answer -the focus of environmental economics and the
focus of natural resources economics
Natural Resources Economics - Answer -flow of natural resources or materials runs
from the environment to the economy
Environmental Economics - Answer -flow of residuals run from the economy to the
environment
Supply - Answer -quantities of a good the producer is willing and able to bring ot
markets at a given set of prices
o Willingness to pay (WTP - Answer -the value or benefit the consumer expects to
receive from consumption of the good
• Rivalry - Answer -a good is rival in consumption when the use by one person
diminishes the use by another person
• Excludability - Answer -a good is excludable when consumers can be prevented from
using the good
• Types of goods
• Environmental economics - Answer -the application of the tools of economics to the
topic of environmental and resources issues
• Positive analysis - Answer -descriptive, factual statement
• Normative analysis - Answer -prescriptive, value-based statement to make judgments
about what is "better" or "worse"
• First Law of Thermodynamics - Answer -matter and energy can neither be created nor
destroyed
• Second Law of Thermodynamics - Answer -nature's capacity to convert matter and
energy is limited; during energy conversion, some energy becomes unstable
• Residual - Answer -the amount of a pollutant remaining in the environment after a
natural or technological process has occurred
• Natural pollutant - Answer -arise from nonartificial processes in nature
• Anthropogenic pollutant - Answer -human induced and include all residuals with
consumption and production
• Stationary pollutant - Answer -a fixed-site producer of pollution
• Mobile pollutant - Answer -any nonstationary polluting source
• Point pollutant - Answer -any single identifiable source from which pollutants are
released
• Non-point pollutant - Answer -a source that cannot be identified accurately and
degrades the environment in a diffuse, indirect way over a relatively broad area
• Local pollution - Answer -damage not far from the source
o Ex: urgan smog, solid waste pollution
• Regional pollution - Answer -damage extends well beyond the source
o Ex: acidic deposition, oil spill
• Global pollution - Answer -- involving widespread environmental effects with global
implications
o Ex: global warming, ozone depletion
, 1. Environmental Quality - Answer -- reduction in anthropogenic contamination to
socially acceptable levels
2. Biodiversity - Answer -assuring the variety of distinct species, genetic variability, and
variety of inhabitable ecosystems
3. Sustainable Development - Answer -management of resources to ensure long-term
quality and abundance for future generations
1. Allocative Efficiency - Answer -requires resources to be appropriated such that
additional benefits equal additional costs
2. Cost Effectiveness - Answer -requires that the minimum amount of resources be
used to achieve an objective
3. Environmental Justice - Answer -concern the fairness of the environmental risk
burden across segments of population or geographic region
1. Command and Control approach - Answer -a policy directly regulates polluters
through the use of rules or standards
2. Market Based approach - Answer -an incentive-based policy that encourages
conservation practices or pollution reduction strategies
Materials Balance Model - Answer -the focus of environmental economics and the
focus of natural resources economics
Natural Resources Economics - Answer -flow of natural resources or materials runs
from the environment to the economy
Environmental Economics - Answer -flow of residuals run from the economy to the
environment
Supply - Answer -quantities of a good the producer is willing and able to bring ot
markets at a given set of prices
o Willingness to pay (WTP - Answer -the value or benefit the consumer expects to
receive from consumption of the good
• Rivalry - Answer -a good is rival in consumption when the use by one person
diminishes the use by another person
• Excludability - Answer -a good is excludable when consumers can be prevented from
using the good
• Types of goods
