Transcript 02_Lecture_Presentation-1 - Saint Joseph High School

CHAPTER 2
Economics, Politics,
and Public Policy
© 2011 Pearson Education, Inc.
China: factory to the world
• The Chinese economy has grown at 10% per year
• People own a car and an apartment
• Travel
• Purchase consumer goods
• China has a huge labor pool
• People move to urban centers for jobs
• The literacy rate is over 90%
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China’s environmental problems
• Toxic air: China has 16 of the world’s most polluted
cities
• Sulfur dioxide from coal-burning power plants and
stoves
• Air pollution kills 750,000 people prematurely each
year
• During the 2008 summer Olympics, Beijing closed
factories and banned cars
• Toxic water: China is the cancer capital of the world
• High esophageal and stomach cancer rates
• The Yellow River is being sucked dry by irrigation
• Water is grossly polluted with sewage and industrial
wastes
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The Yellow River turns red
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China’s environmental laws?
• The Chinese economy flourished due to
decentralization of power
• Local governments and private industries developed
free from central planning
• They flaunted environmental laws and policies
• The State Environmental Protection Agency could not
enforce the laws
• China turned to international nongovernmental
organizations to focus attention on environmental
issues
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China: the bottom line
• Economic growth can lift millions out of poverty
• But when this growth is at the cost of natural
resources and people’s health, it is unsustainable
• Industrialized countries have environmental laws
and regulations to address problems
• Economic growth must be accompanied by the
development and enforcement of just and effective
environmental public policies
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Economics and the environment
• Economics: the social science that deals with
• The production, distribution, and consumption of
goods and services, and
• The theory and management of economies or
economic systems
• Economic goods and services are connected to, and
depend on, the environment
• We need to understand the biological and physical
world
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Relationships between economics and
the environment
• An economy: the system of exchanges of goods
and services worked out by members of society
• Goods and services are produced, distributed, and
consumed
• People make economic decisions about
• What they want and what they need
• What they provide to others
• Economic activity impacts all society
• It can damage the environment and human health
• Government rules and regulations imposed limits
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Development and policies
• A relationship exists between a nation’s
development and its environmental public policies
• Patterns between environmental indicators and per
capita income levels show that as income levels rise,
• Problems (inadequate sanitation) decline through
taxes and technology
• Problems (air pollution) increase and then decline
through recognition and public policies
• Problems (suburban sprawl, CO2 emissions) increase
• Effective public policies and institutions solve
problems
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Environmental indicators and income
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Economic systems
• Economic systems: social and legal arrangements
people construct to satisfy their needs and wants
• To improve their well-being
• A centrally planned economy: occurs with
dictatorships
• A free-market (capitalistic) economy: occurs with
democracies
• “Factors of production” in an economy
• Land (natural resources)
• Labor
• Capital
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The classical view of economic activity
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Economic activity
• Involves the circular flow of money and products
• Money flows from households to businesses
• People pay for goods and services
• Money flows from businesses to households
• People are paid for their labor
• Labor, lands, and capital are invested
• In the production of goods and services by
businesses
• In the products consumed by households
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The rulers decide
• The rulers make all basic decisions in a centrally
planned economy
• What, when, and how much is produced
• Where and by whom
• The government owns and manages industry
• Workers lack freedom to choose or change jobs
• Seen in China and the Soviet Union
• An environmental and economic disaster
• China grew economically when it abandoned this
model
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The market decides
• In a free-market economy
• The market itself decides what will be exchanged
• The market is free from governmental interference
• The system is open to competition and the interplay
of supply and demand
• With a limited supply: prices rise
• The system is driven by people acting in their
self-interest
• To obtain goods, services, and wealth
• Competition increases efficiency
• This system works best when it is left alone
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Governments step in
• No country has a pure form of either economy
• Governments are involved in most market economies
• Governments own and operate infrastructure
• Postal services, power plants, public transportation
• They also control interest rates and adopt policies
• To stimulate economic growth
• Powerful business interests manipulate market
economies
• Unscrupulous people can defraud others
• Only the government can police the market
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Is there an economic conscience?
• Many believe a capitalist economic system lacks a
conscience
• A market economy creates hardship for the poor
• Workers are often exploited
• Market economies only offer access to goods and
services
• Access alone does not provide them to the poor
• Society must provide a safety net
• Self-interest leads to resource exploitation and
pollution
• Governments also manipulate the market
• Through barriers and subsidies
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International trade and the WTO
• Trade is a fundamental economic activity
• It drives the free-market economy
• It has become a dominant force in society through
increased globalization
• The World Trade Organization (WTO)
• Implements and enforces trade rules
• Tries to reduce or eliminate trade barriers (tariffs) and
subsidies
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Free trade rules
• The WTO adjudicates international trade issues
• Elevating free trade over human rights and
environmental concerns
• Carrying out trade agreements and dispute rulings in
closed sessions
• The WTO ruled against the United States for
• Requiring shrimp imports to be certified as turtle safe
• Banning the import of wooden crates because they
harbored the Asian long-horned beetle
• Banning products made by using child labor
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More talk
• Talks have broken down in recent WTO meetings
• Developed nations subsidize their farmers
• Developing nations protect farmers by erecting tariffs
• The future of the WTO is unclear
• Failure to reach agreements signals a weakening in
global trade governance
• The future will likely consist of bilateral agreements
between countries
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The need for a sustainable economy
• The global economy successfully mobilizes people
• To engage in economic activity
• The global economy has improved well-being
• Higher life expectancy
• Labor-saving devices
• Lifestyle and work opportunities
• It has also created environmental problems
• Poverty and hunger
• Decline of ecosystem goods and services
• Loss of biodiversity
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A sustainable economy
• Instead of promoting growth, it will improve human
well-being
• Instead of drawing down natural capital, it will value
and preserve ecosystem goods and services
• Instead of using damaging technologies, it will use
the precautionary principle to minimize risks
• Businesses will eagerly provide green products
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Resources in a sustainable economy
• Land, labor, and capital are essential resources for a
country’s economy
• Ecological economists argue that the environment
encompasses the economy, not the other way
around
• Without the environment there is no economy
• Economic production: the process of converting
the natural world to the manufactured world
• Resources from the environment are transformed by
labor and capital
• Then reenter the environment as waste
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Environmental economic view
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Ecosystem capital
• Ecosystem capital: the role of natural
ecosystems as essential life-support elements
• As the economy grows, the natural world shrinks
• Natural capital: ecosystem capital plus nonrenewable mineral resources (fossil fuels and
minerals)
• A major element in a nation’s wealth
• Natural capitalism: an economic system
promoting sustainability
• It recognizes the central role of natural ecosystems
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Produced capital
• Three major components of a nation’s wealth
• Produced, natural, and intangible capital
• Produced capital: goods and services
• Human-made buildings and structures
• Machinery and equipment
• Savings
• The most easily measured
• Assets have clear income-earning potential
• Assets become obsolete and must be replaced
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Natural capital
• Goods and services supplied by natural ecosystems
• Including mineral resources
• Renewable natural capital (ecosystem capital): can
be depleted if not managed wisely
• For production of goods: forests, fisheries, water
• Provides services: waste breakdown, climate
regulation, oxygen production
• Nonrenewable natural capital: can be depleted
• Provides no service unless it is extracted
• Some components are easier to measure than
others
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The three elements of intangible capital
• Human capital: the population’s physical,
psychological, and cultural attributes (talents,
competencies, abilities)
• Social capital: societal and political environment
• Government, laws, court systems, civil liberties,
religious or ethnic affiliations
• Social relationships affect, and are affected by,
economic processes
• Knowledge assets: knowledge that can be
transferred to others (e.g., libraries, schools,
universities, the Internet)
• Useful only if people have access to them
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The wealth of nations
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These assets improve well-being
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Calculations
• The World Bank measured and evaluated the wealth
of nations
• They found notable differences in per capita wealth
• Human resources are the dominant source of wealth
• Natural capital also ranks high
• It would rank even higher if service components were
included in the calculations
• Natural capital plays a more important role in poor
countries
• They depend more on their natural resources
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Measuring economic progress
• The dominance of intangible capital
• Shows the importance of investing in health,
education, and nutrition
• Emphasizes an efficient judicial system and an
uncorrupt government (social capital)
• The tool for measuring true economic progress:
• Growth in all components of wealth
• Not just growth in the gross national product (GNP) or
gross domestic product (GDP)
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Using GDP or GPI to measure progress
• Gross national product (GNP): all goods and
services produced (consumed) by a country in a
given time frame
• The most common indicator of health and wealth
• Gross domestic product (GDP): GNP minus net
income from abroad
• Compares rich and poor countries
• Assesses economic progress
• Net GDP accounts for assets used in the production
process
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GDP is flawed
• Buildings and equipment wear out or depreciate
• Capital depreciation: is charged against the value of
production
• Net GDP: production of goods and services minus
capital depreciation
• It does not include goods created and services
performed by a family for itself (e.g., subsistence
farming)
• It also omits natural services provided by
ecosystems
• Clean air helps prevent asthma, but is not included in
GDP
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Natural capital depreciation
• GNP does not account for depreciation of natural
capital
• Resources and services are considered nature’s gift
• After logging a forest, a nation can account for sale
of the timber
• But not loss of natural services
• Environmental degradation and depletion count as
an asset and as economic productivity
• Nations underestimate the value of their resources
• Leads to depletion of fisheries, soils, forests, and
rangelands
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Correcting GDP
• To correct this system: calculate the current market
value of natural assets
• Consider it as part of a nation’s wealth
• Add the value due to natural services performed
• When natural resources are depleted, the
depreciation would be used in calculating GDP
• An accurate GDP accounts for all depreciation
• This does not happen
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Environmental accounting: Agenda 21
• Agenda 21: a document from the 1992 Earth Summit
in Rio de Janeiro
• Called for developing national systems of integrated
environmental and economic accounting
• Countries should put environmental assets and
services in monetary units
• Include the effects of environmental accounting on
their net domestic product
• Integrate environmental and economic accounting
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Genuine Progress Indicator
• GDP does not measure true economic progress
• Growth is offset by environmental and social costs
• Genuine Progress Indicator (GPI): assumes
some economic activities are positive and
sustainable
• Others are not
• Positive factors: housework, parenting,
volunteering
• Negative factors: crime, pollution, resource
depletion, farmland loss
• In the U.S. in 2004: GDP = $11.71 trillion
• GPI = $4.42 trillion ($11.06 trillion – $6.64 trillion)
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GDP and GPI per capita
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Essential conditions for a market
economy
• Resources are not distributed evenly among nations
• The greatest differences are in intangible and
produced capital
• To achieve equity in the distribution of resources,
economic development must support
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Social capital: definition and enforcement of rights
Laws, an honest legal system, a free press
A well-developed market economy
Free entry into and exit from markets
Communication and transportation networks
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Societies lacking these essential
conditions
• Suffer poverty and environmental degradation
• Corruption, inefficiency, banditry
• Injustice and intolerance
• The rule of law index: a major part of intangible
capital
• Switzerland scores a 99.5 out of 100
• Nigeria scores a 5.8 (corruption and human rights
abuses)
• Some countries have a negative intangible capital
• They are becoming poorer
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Intergenerational equity
• Intragenerational equity: making possible for others
what is possible for you
• Intergenerational equity: for sustainable
development
• Meeting the needs of the present without harming the
ability of future generations to meet their needs
• Problems with this perspective: the discount rate
• Finding the present value of some future benefit or
cost
• A dollar is worth more today than in five years
because we can earn interest on it now
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Use it up!
• Some resources or benefits are worth more now
than in the future
• For example, an owner of a forest can
• Cut all the trees and sell the timber
• Hold onto the trees and hope for a higher price
later
• Sustainably harvest the trees and spread out the
profits
• If the trees grow slower than the interest rate, the
profitable decision is to cut them now
• This calls for maximizing short-term profit over
long-term resource use
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Maximizing short-term profit is
problematic
• Future generations bear ecological costs
• The self-interest of present individuals conflicts with
the long-term sustainable interests of society
• Some argue that conserving resources puts the
interests of future generations above today’s poor
• However, many are willing to sacrifice now to protect
their children and grandchildren
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Environmental public policy
• Includes laws and regulations that deal with a
society’s interactions with the environment
• Is developed at all levels of government
• Local, state, federal, and international
• Its purpose is to promote the common good
• Its two goals are
• To improve human welfare
• To protect the natural world
• It addresses prevention or reduction of pollution
• As well as the use of natural resources
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Societies need environmental public
policy
• All public policy is developed in sociopolitical context
called politics
• Humans can do great damage to the environment if
society does not have an environmental policy
• Often seen in developing nations
• Laws protecting the environment are not luxuries to
be tolerated only if they do not interfere with freedom
or economic development
• They are part of the foundation of human society
• They are essential for sustainability
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Policy in the United States
• The U.S. Constitution has established the most
effective form of government on Earth
• The three branches of government help establish and
enforce environmental public policy
• The legislative branch (Congress): citizens elect
legislators to the Senate and House of
Representatives
• It establishes laws
• The executive branch: citizens elect the president
• Administrative agencies report to the president
• The judicial branch: interprets the law
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Three branches of the U.S. government
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Rules and regulations
• Congress has responsibility for environmental public
policy
• Government agencies implement legislation
• Agencies develop rules and regulations covered in
the law
• They put the bite in the laws
• Business and other groups may comment on the
rules
• New rules are published in the Federal Register
• The executive branch asks for money for agencies
and programs
• Congress decides how much will actually be funded
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Policies at the local level
• States replicate the structure of the federal
government
• Cities and towns use conservation commissions,
planning boards, health boards, water and sewer
commissions, etc.
• Cities and towns establish
• Zoning regulations and policies like smart growth
• Recycling and “pay-as-you-throw” regulations
• States have established policies to reduce
greenhouse gas emissions, encourage recycling,
etc.
• They are often ahead of the federal government on
environmental issues
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Policy options
• The object of environmental public policy: to change
the behavior of polluters and resource users
• To benefit public welfare and the environment
• Two approaches are used to accomplish changes
• Command and control strategy: a direct regulatory
approach that sets standards and prescribes
technologies
• Market strategy: uses the market to set prices on
pollution and resource use
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Command and control (regulatory)
approach
• With most laws, standards and regulations are
established
• Polluters are required to comply with these regulations
• This approach works well with land use issues
• It guarantees some level of pollution
• Polluters have no incentive to use technology to lower
pollution
• A better approach: set a standard (for air or water
quality)
• Let the polluter decide how best to achieve the standard
• Control is in the hands of the polluter
• Pollution prevention is still the best course of action
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Market approaches
• Are simple, efficient, and equitable
• All polluters are treated equally
• Base their responses on profitability
• Use incentives to reduce resource use and pollution
costs
• The cap-and-trade system of SO2 emissions
• User fees (pay as you throw)
• Payments for ecosystem services (PES):
establishes a monetary value for an ecosystem
service
• Beneficiaries pay landowners to maintain the service
instead of converting their land to another use
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Public policy development: the policy
life cycle
• As countries develop, they deal with problems
• Through effective public policies
• But, other problems (e.g., air pollution, ozone
depletion) arise that require further public policy
development
• Policy life cycle: the predictable course of policy
development
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The policy life cycle
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The recognition stage of a policy life
cycle
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Is low in political weight
Begins with early perceptions of a problem
Results from published scientific research
The media popularize the information
Public involvement starts the political process
Dissension is high because opposing views surface
The problem gets attention from some level of
government
• The possibility of addressing it with public policy is
considered
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Mario Molina and Sherwood Rowland
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The formulation stage of a policy life
cycle
• A stage of rapidly increasing political weight
• The public is aroused and debates policy options
• Political battles occur over regulation and who pays
for it
• High media coverage
• Politicians hear from their constituencies and
lobbyists
• The three E’s of environmental policy
• Effectiveness: does it accomplish what it intends?
• Efficiency: is its objective reached with the least cost?
• Equity: does everybody share the financial burden
equally?
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The implementation stage of a policy
life cycle
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The real political and economic costs are exacted
The policy has been determined
Focus moves to regulatory agencies
Public concern and political weight decline
The media lose interest
The emphasis shifts to development and
enforcement of regulations
• Industry learns how to comply
• As all players gain experience with the policy
attention is paid to efficiency and equity
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The control stage of a policy life cycle
• Years have passed since the recognition stage
• The environment is improving
• Policies are supported
• They become embedded in society
• However, they are vulnerable to political shifts
• Regulations become streamlined
• The public may forget there was a serious problem
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Different problems are in different
stages
• Countries in different stages of development are in
different stages of the policy life cycle for any
problem
• Developing countries have serious problems
because public policies have not caught up with the
need for control
• Discrepancies result from the costs of development
and implementation of public policy
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Environmental problems in the policy
life cycle
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Costs of environmental public policy
• Some policies have little or no direct monetary costs
• No major investment of administration or resources
• For example, removing subsidies or denying access
to national resources (e.g., for cattle grazing or
logging)
• But they have real political costs as powerful interests
try to keep their privileges
• Most policies impose real economic costs that must
be paid
• The equity principle: beneficiaries (customers and
those whose health is protected) should pay
• Through higher taxes or charges
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Subsidized access to public resources
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Impact on the economy
• Special interest groups and conservative think tanks
argue that environmental regulations are excessive
• They are bad for the economy
• Costing jobs, reducing competitiveness, imposing
nonproductive costs on the economy
• These groups try to roll back laws and regulations
• The “environment versus economy” tradeoff is a
myth
• Environmental protection has no significant adverse
effect on the economy
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Environmental protection is not bad
for the economy
• Anecdotes are used for or against environmental
policy
• According to careful studies, environmental
regulation is not bad for jobs and the economy
• 1.7% of “value added” came from pollution control
• 0.1% of jobs lost were environmentally related
• States with the strictest regulations had the highest
job growth and economic performance
• The environmental protection industry is huge
• In one year, this industry raised billions of dollars and
created millions of jobs
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Impacts of environmental policy
• Environmental public policy does not diminish a
nation’s wealth
• It transfers it from polluters to pollution controllers
• The environmental protection industry is a major
job-creating, profit-making, sales-generating
industry
• The argument that environmental protection is
bad for the economy is unsound
• Environmental protection is good for the economy
• It is responsible for a healthier, more enjoyable
environment
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Benefit-cost analysis
• The president issues executive orders
• To government agencies or departments
• President Reagan issued Executive Order 12291
• All major regulations must have a benefit-cost
analysis
• A benefit-cost analysis: examines the need for a
proposed regulation
• Describes alternatives
• Compares costs to the benefits that will be achieved
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Costs versus benefits
• If the benefits outweigh the costs of an action
• The action is cost effective
• There is an economic justification for proceeding
• If costs outweigh the benefits
• The project may be revised, dropped, or shelved
• Benefit-cost analysis builds efficiency into policy
• So society won’t pay more than necessary for a level
of environmental protection
• A properly done analysis considers all costs and
benefits
• Including external costs
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External costs
• An external cost: some effect of a business
process not included in the usual calculations of
profit and loss
• An external bad: pollution affects health
• An external good: learning improves worker
performance
• Without regulatory control
• There are no direct costs to a business for degrading
resources (clean air, uncontaminated water)
• There are no economic incentives to stop polluting
• Including all costs and benefits of a project brings
externalities into economic accounting
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Environmental regulations impose real
costs
• The costs of pollution control include
• The price of purchasing, installing, operating, and
maintaining pollution-control equipment
• The price of implementing a control strategy
• Banning an offensive product also incurs costs
• Causes job losses and development of new products
and machinery
• Regulations prevent an external bad by imposing
economic costs shared by government, industry,
and consumers
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Costs go up
• Pollution control costs increase exponentially with
increased control
• Pollution may be partially reduced inexpensively
• But further reductions require expensive measures
• 100% control is impossible at any cost
• Regulatory control focuses on optimum costeffectiveness
• Costs of pollution control are powerful incentives to
substitute, recycle, or redesign processes
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Benefit-cost ratio for reducing pollution
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Costs go down
• In most cases, pollution-control technologies and
strategies are understood and available
• Equipment, labor, and maintenance costs can be
estimated
• Unanticipated problems increase costs
• Experience and alternatives reduce costs
• Industry and government overestimate regulatory
costs
• They don’t anticipate technological innovation
• Deliberate attempts to project costs so high that
regulators back down
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The cost-effectiveness of pollution
control
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The benefits of environmental
regulation
• The Regulatory Right to Know Act: directs the
Office of Management and Budget (OMB) to report
to Congress
• Estimates of the costs and benefits of federal rules
• Benefits must exceed the costs of compliance
• Benefits of policies are hard to calculate
• Costs include poor health and damages that would
have occurred without regulations
• Benefits include improved human health, less
destruction of materials and natural resources, and
future environmental use
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Benefits and costs of major regulations
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Shadow pricing
• Many benefits are difficult to estimate
• How can a dollar value be put on breathing cleaner air?
• Shadow pricing: assesses what people might pay for
a particular benefit
• For example, houses close to airports had lower values
• Shadow pricing is hard when putting a value on
human life
• A lower value leads to less regulation
• Shadow pricing for nonhuman parts of the
environment depends on people’s willingness to pay
for preservation
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Cost-effectiveness analysis
• An alternative option for evaluating costs of
regulation
• The merits of the goals are accepted
• How can that goal be achieved at least cost?
• Alternative strategies are analyzed for costs
• The least costly method is adopted
• Significant benefits are achieved by modest degrees
of cleanup
• At some point, cleanup becomes too expensive
• Optimum cost-effectiveness occurs where the benefit
curve is highest above the cost curve
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Progress
• Environmental regulation’s expenditures have paid
for themselves many times over
• Decreased health care costs and a better
environment
• Some accomplishments of environmental public
policy
• Air pollutants, lead, and toxic chemicals have
decreased
• Water is cleaner, recycling has increased, and toxic
sites have been cleaned up
• Benefit-cost analysis is now part of U.S. public
policy
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Politics and the environment
• Environmental public policies impact businesses and
private life
• Political battles accompany environmental issues
• Early environmental policies had broad political
support
• An environmental backlash occurred in the 1990s
• Conservatives want reduced regulation to free up
market forces
• They view environmentalists as the enemy of free
enterprise
• The public does not support this view
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Special interest politics
• Special interests hire lobbyists to influence
congressional committee members
• A constant battle occurs between environmental
NGOs and the wealthier antienvironmental interests
• Relying on environmental interest groups to protect
the environment is flawed
• Environmental protection is a matter of public good
• It is a basic responsibility of government
• It is a fundamental human right
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President George W. Bush
• His environmental policy wrecked environmental
programs
• He was supported by anti-environmental interests
• Environmental policies were weakened or canceled
• The U.S.: withdrew from the Kyoto protocol, canceled
support for international family planning, softened
pollution regulations, favored exploitation of fossil fuels
• Bush used the regulatory process to change policies
• Rules from agencies reflect White House ideology
• Scientists were pressured to suppress findings that
were inconsistent with policy or unfavorable to
business
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A new broom
• President Barack Obama reversed many Bush-era
policies
• One directive prevents political interference in science
• The EPA considers greenhouse gases serious threats
• Mountaintop coal debris is no longer dumped in
streams
• Federal agencies must once again consult with wildlife
experts before taking actions that could harm species
• His administration is embracing a new climate policy
• He has appointed exemplary scientists to head
agencies
• Scientific integrity: a main concern in formulating
policy
• America will move toward sustainability
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Citizen involvement
• The public is directly involved in public policy
• We receive the outcome of policies
• We pay for benefits through taxes and higher costs
• To impact public policies
• Become involved in local environmental problems
• Become a member of an environmental
organization
• Inform your legislatures of your support for
environmental policies
• Know the viewpoints of political candidates
• Stay informed on environmental affairs
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CHAPTER 2
Economics, Politics,
and Public Policy
Active Lecture Questions
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Review Question-1
Three basic components that determine the
economic flow of goods and services are
a. land, labor, and capital.
b. capital, consultation, and control.
c. sustainability, labor, and formulation.
d. land, consultation, and capital.
© 2011 Pearson Education, Inc.
Review Question-1 Answer
Three basic components that determine the
economic flow of goods and services are
a. land, labor, and capital.
b. capital, consultation, and control.
c. sustainability, labor, and formulation.
d. land, consultation, and capital.
© 2011 Pearson Education, Inc.
Review Question-2
A benefit-cost analysis compares the
a. merits of one project with those of another.
b. estimated costs of a project with the
expected revenues of the project.
c. estimated costs of a project with the
benefits that will be achieved.
d. tangible with the intangible costs of a
project.
© 2011 Pearson Education, Inc.
Review Question-2 Answer
A benefit-cost analysis compares the
a. merits of one project with those of another.
b. estimated costs of a project with the
expected revenues of the project.
c. estimated costs of a project with the
benefits that will be achieved.
d. tangible with the intangible costs of a
project.
© 2011 Pearson Education, Inc.
Review Question-3
What are the two major types of economic
systems that have emerged in organized
societies?
a. The top-down and bottom-up economies
b. The industrialized and agricultural
economies
c. Developing and developed economies
d. Centrally planned and free-market
economies
© 2011 Pearson Education, Inc.
Review Question-3 Answer
What are the two major types of economic
systems that have emerged in organized
societies?
a. The top-down and bottom-up economies
b. The industrialized and agricultural
economies
c. Developing and developed economies
d. Centrally planned and free-market
economies
© 2011 Pearson Education, Inc.
Review Question-4
The effect of a business process that is not
included in the usual calculations of profit and
loss is the
a. external cost.
b. internal cost.
c. cost-benefit analysis.
d. all of the above.
© 2011 Pearson Education, Inc.
Review Question-4 Answer
The effect of a business process that is not
included in the usual calculations of profit and
loss is the
a. external cost.
b. internal cost.
c. cost-benefit analysis.
d. all of the above.
© 2011 Pearson Education, Inc.
Review Question-5
True or False: The gross national product
(GNP) and the gross domestic product (GDP)
are comparable; both are indicators of the
economic health and wealth of a country.
a. True
b. False
© 2011 Pearson Education, Inc.
Review Question-5 Answer
True or False: The gross national product
(GNP) and the gross domestic product (GDP)
are comparable; both are indicators of the
economic health and wealth of a country.
a. True
b. False
© 2011 Pearson Education, Inc.
Interpreting Graphs and Data-1
According to Fig. 2-11, the environmental issue
of global warming is predominantly in which
stage of the policy life cycle?
a. Recognition
b. Formulation
c. Implementation
d. Control
© 2011 Pearson Education, Inc.
Interpreting Graphs and Data-1 Answer
According to Fig. 2-11, the environmental issue
of global warming is predominantly in which
stage of the policy life cycle?
a. Recognition
b. Formulation
c. Implementation
d. Control
© 2011 Pearson Education, Inc.
Interpreting Graphs and Data-2
According to Fig. 2-13, what range of reduction
of pollution has the optimum cost-effectiveness?
a. 0-15%
b. 20-30%
c. 50-75%
d. 75-90%
© 2011 Pearson Education, Inc.
Interpreting Graphs and Data-2 Answer
According to Fig. 2-13, what range of reduction
of pollution has the optimum cost-effectiveness?
a. 0-15%
b. 20-30%
c. 50-75%
d. 75-90%
© 2011 Pearson Education, Inc.
Thinking Environmentally-1
Which of the following is true about the Chinese
economy and people?
a. The economy has doubled in the last
decade
b. The economy is growing at close to 10%
per year
c. The new middle class numbers between
100 and 150 million
d. All of the above
© 2011 Pearson Education, Inc.
Thinking Environmentally-1 Answer
Which of the following is true about the Chinese
economy and people?
a. The economy has doubled in the last
decade
b. The economy is growing at close to 10%
per year
c. The new middle class numbers between
100 and 150 million
d. All of the above
© 2011 Pearson Education, Inc.
Thinking Environmentally-2
The four stages of the policy life cycle in order
are
a. recognition, formulation, control,
implementation.
b. formulation, control, recognition,
implementation.
c. recognition, control, implementation,
formulation.
d. recognition, formulation, implementation,
control.
© 2011 Pearson Education, Inc.
Thinking Environmentally-2 Answer
The four stages of the policy life cycle in order
are
a. recognition, formulation, control,
implementation.
b. formulation, control, recognition,
implementation.
c. recognition, control, implementation,
formulation.
d. recognition, formulation, implementation,
control.
© 2011 Pearson Education, Inc.