Part 1 (Chapters 1, 2, and 3) Flashcards
(68 cards)
The study of how we decide to use scarce resources to satisfy the demand.
Economics
A social system that converts resources into goods and services.
Economy
A material commodity manufactured for and bought by individuals and businesses.
Goods
Work done for others as a form of business.
Services
A survival economy, one in which people meet most or all of their daily needs directly from nature and do not purchase or trade for most of life’s necessities.
Subsistence economy
An economy in which buyers and sellers interact to determine which goods and services to produce, how much of them to produce and how to distribute them
Capitalist market economy
An economy in which a nation’s government determines how to allocate resources in a top-down manner. Also called a state socialist economy
Centrally planned economies
An essential service an ecosystem provides that supports life and makes economic activity possible. For example, ecosystems naturally purify air and water, cycle nutrients, provide for plants to be animals, and serve as a receptacles recycling systems for the waste generated by our economic activity.
Ecosystem seviece
Father of classical economics. Believed when people are free to pursue their own economic self-interest in a competitive marketplace, the marketplace will behave as if guided by an invisible hand.
Adam Smith (1723-1790)
Founded by Adam Smith the study of the behavior of buyers and sellers in a free market economy, Holds that individuals acting in their own self-interest may benefit society, provided that their behavior is constrained by the rule of law and by private property rights and operates within competitive markets.
Classical economics
A theory of economics that explains market prices in terms of consumer preferences for units of particular commodities.
Neoclassical economics
A method commonly used by neoclassical economists, in which estimated costs for a proposed action are totaled and then compared to the sum of benefits estimated to result from the action.
Cost-benefit analysis
A negative externality; a cost borne by someone not involved in an economic transaction. Examples include harm to citizens from water pollution or air pollution discharged by nearby factories.
External costs
A developing school of economics that applies the principles of ecology and systems thinking to the description and analysis of economies.
Ecological economists
An economy that does not grow or shrink but remains stable
Steady-state economy
They call for reform. Believe we can attain sustainability within our current economic systems. Developing school of economics that modifies the principles of neoclassical economics to address environmental challenges
Environmental economists
A value that is not usually included in the price of a good or service.
Nonmarket values
The failure of markets to take into account the environments positive effects on economies or to reflect the negative effects of economic activity on the environment and thereby on people.
Market failure
A rule or guideline that directs individual, organizational, or societal behavior.
Policy
Policy made by governments, local, state federal, international levels; consists of legislation, regulations, orders incentives and practices intended to advance societal welfare.
Public policy
Public policy that pertains to human interactions with the environment. It generally aims to regulate resource use or reduce pollution to promote human welfare and/or protect natural systems.
Environmental policy
A party that fails to invest in controlling pollution or carrying out other environmentally responsible activities and instead relies on the efforts of other parties to do so.
Free rider
Statutory law.
Legislation
specific rule by administrative agency, based on the more broadly written statutory law passed by congress and enacted by the president
Regulations