Intro to Sustainablity

Sustainability

meeting the needs of the present without compromising the ability of future generations to meet their own needs

Atlantic Cod Collapse

Fishing for cod was a major economic activity, but there were no regulations which led to depletion of cod

Solution of Atlantic Cod Collapse

canadian government imposed a moratorium, led to thousands of job losses; loss of cod affected local economy and marine food web

Economy

system for deciding how scarce resources are used so that goods and services can be produced and consumed

GDP

market value of all goods and services produced in an economy.

Natural Resources

materials that already exist in the world; things that come from nature or the earth

Excludable

possible to exclude people from consuming a good/service

Rivalrous

consumption by one consumers reduces the availability for others

Non rivalrous

consumption by one consumer does not reduce the availability for others

Non excludable

not possible to exclude people from consuming goods/services.

Natual resource/Common pool resources

Non excludable and Rivalrous

Why do natural resources face tragedy of commons?

If there are no clear ownership rights, everyone can use them; leads to overuse and depletion because individuals act in self-interest, without considering long-term effects

Renewable

can be replenished over time (Sunlight, wind, water, forest)

Non-renewable

finite in supply (Oil, coal, natural gas, minerals (gold, iron, copper))

Factors of production

the inputs used to produce goods and services

What are the four Factors of Production?

Land, Labor, Capital, Entrepreneurship

Factors of Production: Land

All natural resources used in production (Farmland, forests, oil, water, minerals)

Factors of Production: Labor

Human effort (physical and mental) in production (Factory workers, teachers, engineers)

Factors of Production: Capital

Man-made tools, machinery or infrasturacture (Buildings, computers, trucks, machines)

Factors of Production: Entrepreneurship

Risk-taking individuals who organize the other factors (business owners, innovator, startup factors)