Take-home Test 2
ECON 320: Environmental Economics
Please complete this test at home and email your answers as a PDF or Word document
to Dr. Wachsman at yoav@coastal.edu.
1. Basic Terms. Please define each of the following terms, provide an example,
and explain why your example makes sense (in other words, why does your
example meet the definition). Each part is worth 5 points.
a. Technology Standard
b. Decomposer (in an ecosystem)
c. Positive Externality
d. Open Access Resource
2. Valuating the Environment. Supposed that you were tasked with evaluating
how much Grand Canyon National Park is worth to the USA. Describe how each
of these methods works and how you would use them to estimate the value of this
national park. Specifically, for each method explain how the method work, what
steps you would take to utilize this method (exactly how you would do it), and
what are some of the challenges (things that make the method hard to use or
inaccurate). Assuming that you have an unlimited budget to conduct this
research. (a) Travel Cost Method. (b) Hedonic Prices (think about the lodges,
restaurants, and houses in or near the park). (c) Contingent Valuation (to
estimate the non-use value). (d) Direct benefits (for example, during research at
the park). Each part is worth 5 points.
3. Global Environmental Issue. Select an environmental issue. The yellow and
green teams should cover large-scale disasters, the yellow team should cover
degradation, and the green team should cover pollution. Answer the following:
(a) Describe the issue in detail. What is going on? Is it getting worse or better?
How extensive is it? Find some relevant statistics. (b) Describe the specific harms
that the issue has for humans. For example, higher healthcare costs, lower
agricultural production, etc. (c) Discuss specific policies that the national
governments can take to help resolve this issue. For instance, certain taxes or
subsidies, technology standards, etc. (d) Do you believe this issue will improve or
worsen during the 21st century? Argue why. Each part is worth 5 points.
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