Key Terms

Commons- Land owned publicly, with public access for private uses Direct Costs-Costs carried by the producer in obtaining, processing and distributing a product Environmental Economics-Is about how to persuade people, organizations and society to act in a way that benefits the environment Externality-a.k.a indirect cost, something that is not recognized by producers as part of the cost or benefit Indirect Cost- a.k.a externality, something that is not recognized by producers as part of the cost or benefit Intangible Factor- A factor you cannot touch directly, but is valued. Natural Capital-Ecological systems that provide benefits Policy Instruments-What people do, what people can do, and how people do it Public-Service Functions-A complicating factor in maintaining clean air, soil and water, and sustaining renewable resources is that ecosystems do these without our help. Risk-Benefit Analysis-Riskiness of a present action in terms of possible outcomes is weighed against the benefit. Tangible Factor-A factor you can touch,buy and sell.

Study Questions
1. What is meant by the term the tragedy of the commons? Which of the following are the result of this tragedy? a.The fate of the California Condor b. The fate of the gray whale c. The high price of walnut wood used in furniture. The term tragedy of the commons means freedom of action in a commons inevitably brings ruin to all. People tend to respond buy benefiting themselves rather than by benefiting the commons. People will benefit in the short-run, but in the long-run everyone will lose. 2.Risk-benefit analysis is weighing the riskiness of an action to the benefit of the action.

3.Cherry and walnut are valuable woods used to make fine furniture. Basing your decision on the information in the following table, which would you invest in? a. A cherry plantation b. A walnut plantation c. A mixed stand of both species d. An unmanaged woodland here you see some cherry and walnut growing 4.Bird flu is spread in part by migrating wild birds. How would you put a value on a) the continued existence of one species of these birds. I would base the value on tourism and popularity of the birds, because if it's very popular then there would be more tourism and more money for that place. $10,000 b) domestic chickens important for food but also a major source of the disease. I would base the value on if people want to take risks and keep the chickens, then the value would be high, but if people do not want to risk it, the value would be low. Risk it: $30,000 Don't risk it: $15,000 c) control of the disease for human health? I would base the value on how widespread the disease is and how deadly the disease is. $40,000$70,000 5.Which of the following are intangible resources? Which are tangible? a. The view of Mount Wilson in California b. A road to the top of Mount Wilson c. Porpoises in the ocean d. Tuna in the ocean e. Clean air 6. What kind of future value is implied by the statement "Extinction is forever"? Discuss how we might approach providing economic analysis for extinction. After the loss of resources needed, there will be no profit and no value to the resource anymore. We might approach providing economic analysis for extinction based on whether the organism provides ecological services or not for each organism. 7. Which of the following can be thought of as commons in the sense meant by Garret Hardin? Explain your choice

a. Tuna fisheries in the open ocean-People benefit themselves by getting the most possible tuna to sell and maximize profit, rather than letting them reproduce. b. Catfish in artificial freshwater ponds c. Grizzly bears in Yellowstone National Park d. A view of Central Park in New York City e. Air over Central Park in New York City