Lecture 1 - I. What is Environmental Economics? Economics...

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I. What is Environmental Economics? Economics is the study of the allocation of scarce resources. o Note that the theories of economics can be applied to any scarce resource, not just traditional commodities. o Economics is not simply about profits or money. It applies anywhere constraints are faced, so that choices must be made. o Economists study how incentives affect people’s behavior. Environmental and natural resource economics is the application of the principles of economics to the study of how environmental and natural resources are developed and managed. o Natural resources – resources provided by nature that can be divided into increasingly smaller units and allocated at the margin. o Environmental resources – resources provided by nature that are indivisible. o Natural resources serve as inputs to the economic system. Environmental resources are affected by the system (e.g. pollution). II. Why Study Environmental Economics? In general, prices reflect the relative scarcity of goods. o
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This note was uploaded on 04/05/2012 for the course ECON 332 taught by Professor Hilarysigman during the Fall '11 term at Rutgers.

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Lecture 1 - I. What is Environmental Economics? Economics...

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