1. What is an “economy”?

2. What are the defining characteristics of these two economic systems?

            subsistence economy-

            market economy-

3. Why do governments intervene in a market economy?

4. How is the environment viewed in traditional economics?

What are “Ecosystem Services,” and why are they important?

5. What is Adam Smith’s Invisible Hand hypothesis?

6. How are prices determined in a free market economy?

7. How does Cost-Benefit analysis work?   What are its weaknesses as a basis for making decisions?

8. What are the 4 assumptions in traditional (neoclassical) economics that contribute to environmental problems?

9. What are “externalities”?

10. Why has economic growth been considered desirable throughout human history?

11. What is meant by the term “Affluenza”?

12. How would a Steady-State Economy differ from the current models?

13. What is meant by “non-market” values?

14. List the categories of non-market values discussed in the text.

15. How do environmental economists address the misuse of goods and services that have no current market value?

16. What is the estimated annual $ value of ecosystem goods and services, globally?

17. When markets fail to give the correct price, or market signal, what happens?

18. What are the three hallmarks of good environmental policy?

19. Environmental policy exists to protect resources and people from what three consequences?

20. Describe and understand the utility of the following approaches to environmental policy:

            Command and Control-

            Taxbreaks and Subsidies-

            Green taxes-

            Permit Trading-

            Eco-labeling-

            Rebates-

            Socially Responsible Investing-

21. Know what the abbreviations WTO, NGO, EU, UN, UNEP, NAFTA stand for.

22. How have the WTO and NAFTA impacted the environment?