ECON 225 Chapter Notes - Chapter 1: Root Mean Square, Externality, Natural Capital
3 Oct 2018
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Distinguish between e ciency and equity concepts and why they are central to environmental economics. Describe the incentives that contribute to pollution arising from people and rms. De ne and distinguish between open access, private, and common property rights. Economics is the study of how and why people make decisions about the use of valuable resources. How to use our resources in the most valuable way. Environmental economics focuses on how economic activities a ect our natural environment, with a goal of helping society reduce its degradation of the environment. An outcome is e cient if all resources are put to their highest value use. Or if the outcome is achieved by using the fewest amount of resources. When you are e cient, you don"t waste, don"t pollute and use the least amount of resources. Equity relates to how resources are divided among di erent people or groups. E ciency = criteria for evaluating outcomes and policies.
