201 Tragedy of the commons and econ notes

Necessities are

inelastic

Elasticity < - 1 means

inelastic - demand is directly related to price

Externalities are not taken into consideration when...

making decisions

cap and trade system

market-based pollution control system in which the government sets an overall limit on how much of a pollutant is acceptable and issues vouchers to pollute to each company, which companies are then free to trade

cap

most allowed

commons dilemma

specific class of social dilemma in which people's short-term selfish interests are at odds with long-term group interests and the common good

MPC (marginal propensity to consume)

the increase in consumer spending when disposable income rises by $1

Externalities

A side effect of an action that affects a third party other than the buyer or seller.

Elasticity [-1, 0) means

Elastic - demand is inversely relational to price

comparetive advantage

When a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other item.

spatial equivalence

When different companies/regions own different parts of the market

Elasticity of demand

How sensitive demand is to price

Life cycle cost analysis

determines cost of a building, by accounting for initial costs, operation, maintenance, disposal, & residual value.

What are the problems with cap and trade systems. (2)

- May have greater negative effects on different regions. - Produces monopolies

In theory what is the most effective way to stop businesses from polluting

Cap and trade system

multiplyer effect

For each $ spend by consumers, businesses invest in the economy

How do we handle externalizes?

Give the right to one of the parties, and they both win in the end

One problem with emission fees. What happens if it is too high? or too low?

It is hard to choose the fee to charge for pollution. - If the price is too low people will pollute more, and if it is too high the economy will suffer.

Shovel Ready Projects

Job where all paperwork is complete and ready for a shovel

Two problems with regulation of pollution.

Limits business productivity People lie and regulators can be slow to react

Triple bottom line accounting

People, planet, profit

Qualify environmental benefits

Some aspects cannot be considered with costs alown

Elasticity means what in math terms

slope of a line

Tragedy of the Commons

the tendency of a shared, limited resource to become depleted because people act from self-interest for short-term gain

trade

trading credits