exam 3 review-2

exam 3 review-2 - Exam 3 Economic Geography Neo-classical...

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10-10-06 Exam 3 Economic Geography Neo-classical Economics: The pure free market system Adam Smith (1776)- Inquiry into the Nature and causes of the Wealth of Nations Assumptions o Decisions are made in the market place without gov. influence- laissez faire o All buyers and sellers have equal access to the market and are fully informed o Prices reflect all harmful costs to society and the environment (full-cost pricing) The capitalist market system (i.e. the real world) A system that subverts many of the theoretical conditions of a truly free market o Drive out competition o Lobby gov. o Withhold info o Maximize profits o No obligation to nation, community, or environment Marxist Economics Karl Marx and Friedrich Engles (and later Vladimir Lenin) Radical dissent Human labor= value Class consciousness o Exploitation Profit vs. Human needs Competition -> monopolies Ecological Economics Incorporates laws derived from the natural sciences Energy availability and environmental implications of energy use are central Finite economic growth- limited by carrying capacity Economic valuation is imperfect Supply, Demand, and Price Equilibrium Point when supply=demand Keynesian economics- 1930s to present John Maynard Keynes o Neo-classical synthesis- combo of neo-classical and Keynes o Counter-cyclical fiscal policies Economic growth vs. Economic development o GNP o GDP o Per capita GNP Developed vs. developing countries What’s wrong with using GNP and GDP as measures of economic growth and development?
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Hide harmful environmental and social effects of producing goods and services Do not include the depletion and degradation of natural resources Fail to include many nonmonetized benefits that meet basic needs Hide enormous waste of natural resources and human resources Tell us nothing about income distribution and economic justice Benefit-Cost Analysis Historically, the building block of environmental protection and exploitation Some sort of price must be placed on all factors in the resource decision; therefore, a value is placed on the expected costs and benefits The Tragedy of the Commons bring cows see have more so bring more cows and depletion of resources Diversification and Multinational Corporations Trend since the 1970s and 1980s Diversification= protection from unfavorable market conditions in particular
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exam 3 review-2 - Exam 3 Economic Geography Neo-classical...

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