ECO 2118 Study Guide - Midterm Guide: Openaccess, Movie Star, Closed System
22 Jan 2018
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Document Summary
Relationship between planet & economy for material inputs: closed system. Relationship between planet & economy for energy: open system. 2 laws of thermodynamics: energy can neither be created or destroyed. Materials enter economy return to environment as waste. Human development adversely affecting earth"s ability to absorb waste: entropy increases. Measure of loss of energy/materials available for work. Some energy/material is lost when transforming to another form. Closed system must eventually use up available energy & materials: once energy/materials gone rely on sun. Positive statements: how it is/ can be confirmed/ empirical. Normative statements: how it should be (used to compare policy options) Perfectly competitive market provides benchmark for allocation of resources: no barriers to entry, many buyers + sellers, identical goods, perfect information. Quantities demanded/supplied by buyers and sellers are small in relation to other transactions. No single buyer or seller can influence price buyers & sellers = price takers.
