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