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| Environmental economics generally views the economy as a(n) ______ system. |
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| T or F: The standard circular flow model of an economy shows the flow of pollution from firms to households. |
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| History shows that, when faced with scarcity, societies ____________ to solve the problem of resource scarcity. |
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| Thomas Malthus suggested that population growth would eventually lead to _________. |
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| Marginal willingness to pay is how much you are willing to pay for _________ of a good. |
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Definition
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| Consumer Surplus can be described as the area below the ______ and above the ______ for some given quantity. |
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Definition
| demand curve / price line |
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| Marginal Cost is the cost associated with producing ____________. |
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Definition
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| T or F: Marginal costs usually increase in output because land depreciates in value. |
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Definition
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| A firm that is currently making profits should produce more output if the price is _____ than marginal cost. |
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Definition
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| Producer Surplus is equal to ________ minus ________. |
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Definition
| gross revenues / total variable costs |
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| Total surplus can be described by the area below the ______ and above the ______ for some given quantity. |
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Definition
| demand curve / marginal cost |
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Term
| Scarcity rent is a return to scarce inputs owned by the producer in the ______ run. |
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Definition
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| The standard economic technique used to compare present and future benefits and costs is ______. |
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Definition
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| In making environmental decisions, private and social discount rates may differ because ____________. |
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Definition
| social and private risk premiums differ |
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| Weighing the costs and benefits of pollution reduction is considered the ____________. |
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Definition
| standard economic approach to pollution control |
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Term
| T or F: "Increased costs of mining iron ore driving up the price of steel" is an example of an environmental externality. |
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Definition
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| If producing a good generates pollution and nothing is being done about it, the price will be ______ and the quantity produced will be ______. |
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Definition
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| If a business generating pollution is charged a tax per unit of pollution and the demand stays the same, the business will have to ______ its prices and produce ______ of the good. |
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Definition
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| In a Supply & Demand graph, the socially efficient outcome occurs where the ________ equal the ______. |
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Definition
| social marginal benefits / social marginal costs |
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| To incorporate a negative externality into a market graph you would ______ the externality to/from the ________ curve. |
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Definition
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| T or F: Subsidizing steel production is a way to internalize a negative production externality. |
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Definition
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| IF steel producers had to pay a tax on production, the likely impacts would be that Consumer Surplus ______ and Producer Surplus ______. |
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Definition
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| The Coase Theorem states that as long as property rights are well defined and no transaction costs exist, ________ will result. |
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Definition
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| Assuming the Coase Theorem applies, the efficient allocation of a resource will result ____________. |
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Definition
| through negotiations between the parties involved |
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| The costs of conducting a negotiation are called ______ costs. |
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Definition
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| A free market allocation of an open access resource leads to ________ of the resource. |
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| As production effort in harvesting an open access resource increases, _______ is likely to decrease. |
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Definition
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| The total profits from an open access resource are maximized when ______ equals ______. |
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Definition
| marginal revenue / marginal cost |
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Term
| Open access equilibrium for an open access resource occurs where ______ equals ______. |
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Definition
| total revenue / total cost |
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| Open access equilibrium is usually economically ______ and ecologically ______. |
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Definition
| inefficient / unsustainable |
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| Public goods are mainly characterized by ______ in consumption and ______. |
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Definition
| non-rivalry / non-excludability |
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| T or F: National defense is considered a public good. |
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| A good that is used by one person and does not reduce its availability to others is characterized as ______. |
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Definition
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| A home owner that does not participate in a neighborhood cleanup, but his/her property value increases as a result is an example of ________. |
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Definition
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| The socially optimal quantity of a public good can be obtained by ____________. |
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Definition
| vertically adding the demand curves |
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