Environmental Economics - Quiz 1

The study of choices made by agents when resources are scarce

Economics

Is economics a science?

Yes

Consumers, firms governments; all impact the environment with their choices

Agents

What is another name for choices?

Revealed preferences

What do choices explain?

Preferences

Revealed preference for goods in markets and other goods not sold in markets

Choices

Are choices important in environmental problems?

Yes

Resources are always ___

Scarce

What are some examples of resources?

Land, money, undisturbed environment

Choices when resources are scarce cause opportunity costs to be greater or less than 0

Greater than

The next best alternative foregone when making a choice

Opportunity costs

Does OC have to be measured in dollars?

No

OC depend on the ___ ___ when discussing a decision

reference point

What are some OC if we choose to drill in Alaska?

Loss of wildlife, species diversity, wilderness

What are some OC if we do NOT choose to drill in Alaska?

Lost profits and development for the oil industry, lower prices for oil for consumers

When OC > 0 there are always ____ present

tradeoffs