ECON1107 Lecture Notes - Lecture 1: Resource Depletion, Environmental Policy, Ozone Depletion
ECON1107 CH1
how does pollution or resource depletion happen?
both come from decisions made by households and firms- consumption and production draw on the
earth's supply of natural resource. Both activities generate by products that contaminate the
environment
This means the decisions that make up economic activity are directly related to environmental
problems
circular flow model-> illustrates the real and monetary flows of economic activity through the factor
market and the output market
- by analysing how the flows operate and how the size of an economy can change, we can
understand how an economic system functions and the market relationship between households
and firms
- but the model doesnt show the link between economic activity and the environment
materials balance model-> positions the circular flow within a larger schematic to show the
connections between economic decision making and the natural market
-
natural resource economics- a field of study concerned with the flow of resources from nature to
economic activity
residual- the amount of pollutant remaining in the environment afer a natural or technological
process has occurred
first law of thermodynamics- matter and energy can neither be created nor destroyed
second law of thermodynamics- nature's capacity to convert matter and energy is not without
bound
-because some of the energy becomes unusable. Thefore the process on which eonomic activity
depends is finite (can't go on forever)
1. must recognise that every resource we take for economic activity ends up as a residual, which
could damage the environment. the process could be delayed through recycling, reuse etc but it
can't be stopped
2. nature's ability to convert resources to other forms of matter and energy is limited
concepts used to identify environmental damage and describe policy solutions->
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Econ1107 ch1 how does pollution or resource depletion happen? both come from decisions made by households and firms- consumption and production draw on the earth"s supply of natural resource. Both activities generate by products that contaminate the environment. This means the decisions that make up economic activity are directly related to environmental problems circular flow model-> illustrates the real and monetary flows of economic activity through the factor market and the output market. By analysing how the flows operate and how the size of an economy can change, we can understand how an economic system functions and the market relationship between households and firms. Thats impossible- some pollution is natural and thefore not controllable. Economic growth is good but there are long term environmental implications (as seen in materials model). We need to achieve a balance between economic growth and preservation of natural resoources.
