Question

In: Economics

Explain what we mean when we say that the economy exists in an ecological system. How...

Explain what we mean when we say that the economy exists in an ecological system. How can we add the natural capital in a circular flow diagram, and why is it important? Discuss how the concept of negative externalities and property rights are related to pollution and resource degradation.

Solutions

Expert Solution

Economy exists in an ecological system. This means there is a balance in terms of inputs and output. The amount of money flowing in the economy is equivalent to the money flowing out of the economy. Inputs in the form of resources and raw materials come in and the later part is converted to output which is balanced overall.

Natural capital is the stock of natural resources in the environment which includes soil, air water and living organisms. Natural capital acts as an input and is converted into final output in the form of finished goods.

Negative externality causes harm to the third party as a result of economic transaction. Pollution causes harm to the residents of the society who inhales the polluted air and suffer from various ailments. Resource degradation is the depletion of natural environment like soil, air and water which is caused by pollution and leads to degradation of the natural environment.


Related Solutions

What do we mean when we say we have a “distribution of mean differences”? Theoretically, how...
What do we mean when we say we have a “distribution of mean differences”? Theoretically, how would you construct a “distribution of mean differences”?
When we say the media is a business, what do we mean by that? How does...
When we say the media is a business, what do we mean by that? How does that affect the way the media cover politics?
When we say that momentum is conserved for an isolated system, what specifically does that mean?
When we say that momentum is conserved for an isolated system, what specifically does that mean?
a. Explain what we mean when we say that the federal income tax is progressive? b....
a. Explain what we mean when we say that the federal income tax is progressive? b. Explain how progressive income taxes can be accomplished with or without progressive marginal tax rates.
How do we know when social or political inequality exists? What does it mean to be...
How do we know when social or political inequality exists? What does it mean to be “equal”? Are equity and equality the same thing? Should our constitution merely provide the potential for equality to exist? Or should it guarantee an equal outcome?
What do we mean when we say that a histogram is skewed to the left? To...
What do we mean when we say that a histogram is skewed to the left? To the right? What is a bimodal histogram? Discuss the following statement: “A bimodal histogram usually results if we draw a sample from two populations at once.” Suppose you took a sample of weights of college football players and with this sample you included the weights of cheerleaders. Do you think a histogram made from the combined weights would be bimodal? Explain. write in your...
What do we mean when we say that stockholders have limited liability? How does affect the...
What do we mean when we say that stockholders have limited liability? How does affect the desirability of stocks as a financial asset?
What does it mean when we say an interface is 'Up-Up'?
What does it mean when we say an interface is 'Up-Up'?
What does it mean when we say an animal is risk averse?
What does it mean when we say an animal is risk averse?
What does it mean when we say privacy is a prudential right?
What does it mean when we say privacy is a prudential right?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT