Economics of Conservation

1. Economics of Conservation

2. Economics - Basic Economics is a tool which helps us answer 3 basic questions: 1. What commodities should be produced and in what quantity? 2. How should we produce those goods? and 3. For whom should we produce those goods?

3. Descriptive Economics • The description of economic facts and relationships falls under the category of descriptive economics - it is relatively speaking, a pure science and is objective and its questions can only be answered by facts

4. Normative Economics • Normative Economics addresses questions that cannot be answered by facts and figures - where there are no right and wrong answers but rather questions of “should” or “ought”, instead they are questions about value judgments and must be decided by social and political processes

5. Two Basic Economic Systems 1. Command economy in which the government dictates production and distribution goals 2. In a market economy companies generally produce goods and services which produce the highest profit thus answering the first question of what to produce and how much. Profit also dictates how goods are produced. For whom is answered by ability to pay.

6. Elephant Ivory for Sale

7. Oil Prices

8. BFI Monopoly?

9. External Cost • External Cost, a cost to society not paid by the manufacturer or its customers

10. External Costs

11. External Costs?

12. Cost Benefit Analysis • marginal cost of pollution - added cost to all present and future members of society of an additional unit of pollution • marginal cost of pollution abatement - added cost to all present and future members of society of reducing a given type of pollution by one unit

13. Richmond, California

14. Wetlands and Flood Control