Commons: Land that belongs to the public, not to individuals. Historically a part of old English and New England towns where all the farmers could graze their cattle.
Direct costs: Costs borne by the producer in obtaining, processing, and distributing a product.
Environmental economics: Economic effects of the environment and how economic processes affect that environment, including its living resources.
Externality: In economics, and effect not normally accounted for in the cost-revenue analysis.
Indirect cost: Often not recognized by producers as part of their costs and benefits, and therefore not normally accounted for in their cost-revenue analyses.
Intangible factor: One you can't touch directly, but you value it, as with the beauty of the slope before the mudslide.
Natural capital: Ecological systems that provide public service benefits.
Policy instruments: The means to implement a society's policies. Such instruments include moral suasion (jawboning-persuading people by talk, publicity, and social pressure); direct controls, including regulations; and market processes affecting the price of goods, subsidies, licenses, and deposits.
Public-service functions: Functions performed by ecosystems that benefit other forms of life in other ecosystems. Examples include the cleansing of the air by trees and removal of pollutants from water by infiltration through the soil.
Risk-benefit analysis: In environmental economics, weighing the riskiness of the future against the value we place on things in the present.
Tangible factor: In economics, something one you can tough, buy and sell.
Study Questions
1. What is meant by the term the tragedy of the commons? Which of the following are the result of this tragedy?
a.The fate of the California Condor
b. The fate of the gray whale
The term tragedy of the commons means freedom of action in a commons inevitably brings ruin to all. People tend to respond buy benefiting themselves rather than by benefiting the commons. People will benefit in the short-run, but in the long-run everyone will lose.
2.Risk-benefit analysis is weighing the riskiness of the future against the value we place on things in the present.
3.Cherry and walnut are valuable woods used to make fine furniture. Basing your decision on the information in the following table, which would you invest in?
b. A walnut plantation
4.Bird flu is spread in part by migrating wild birds. How would you put a value on
a) the continued existence of one species of these birds.
1. What is meant by the term the tragedy of the commons? Which of the following are the result of this tragedy?
a.The fate of the California Condor
b. The fate of the gray whale
The term tragedy of the commons means freedom of action in a commons inevitably brings ruin to all. People tend to respond buy benefiting themselves rather than by benefiting the commons. People will benefit in the short-run, but in the long-run everyone will lose.
2.Risk-benefit analysis is weighing the riskiness of the future against the value we place on things in the present.
3.Cherry and walnut are valuable woods used to make fine furniture. Basing your decision on the information in the following table, which would you invest in?
b. A walnut plantation
4.Bird flu is spread in part by migrating wild birds. How would you put a value on
a) the continued existence of one species of these birds.
Base the value of tourism and popularity of the birds, because if it's very popular then there would be more tourism and more money for that place. $10,000
b) domestic chickens important for food but also a major source of the disease.
Base the value on if people want to take risks and keep the chickens, then the value would be high, but if people do not want to risk it, the value would be low. Risk it: $30,000 Don't risk it: $15,000
c) control of the disease for human health?
Base the value on how widespread the disease is and how deadly the disease is. $40,000-$70,000
5.Which of the following are intangible resources? Which are tangible?
Intangible resources: a. The view of Mount Wilson in California. e. Clean air
Tangible resources:b. A road to the top of Mount Wilson. c. Porpoises in the ocean. d. Tuna in the ocean
6. What kind of future value is implied by the statement "Extinction is forever"? Discuss how we might approach providing economic analysis for extinction.
After the loss of resources needed, there will be no profit and no value to the resource anymore. We might approach providing economic analysis for extinction based on whether the organism provides ecological services or not for each organism.
7. Which of the following can be thought of as commons in the sense meant by Garret Hardin? Explain your choice
a. Tuna fisheries in the open ocean-People benefit themselves by getting the most possible tuna to sell and maximize profit, rather than letting them reproduce.
b. Catfish in artificial freshwater ponds
c. Grizzly bears in Yellowstone National Park
d. A view of Central Park in New York City
e. Air over Central Park in New York City
b) domestic chickens important for food but also a major source of the disease.
Base the value on if people want to take risks and keep the chickens, then the value would be high, but if people do not want to risk it, the value would be low. Risk it: $30,000 Don't risk it: $15,000
c) control of the disease for human health?
Base the value on how widespread the disease is and how deadly the disease is. $40,000-$70,000
5.Which of the following are intangible resources? Which are tangible?
Intangible resources: a. The view of Mount Wilson in California. e. Clean air
Tangible resources:b. A road to the top of Mount Wilson. c. Porpoises in the ocean. d. Tuna in the ocean
6. What kind of future value is implied by the statement "Extinction is forever"? Discuss how we might approach providing economic analysis for extinction.
After the loss of resources needed, there will be no profit and no value to the resource anymore. We might approach providing economic analysis for extinction based on whether the organism provides ecological services or not for each organism.
7. Which of the following can be thought of as commons in the sense meant by Garret Hardin? Explain your choice
a. Tuna fisheries in the open ocean-People benefit themselves by getting the most possible tuna to sell and maximize profit, rather than letting them reproduce.
b. Catfish in artificial freshwater ponds
c. Grizzly bears in Yellowstone National Park
d. A view of Central Park in New York City
e. Air over Central Park in New York City