Economics 1370

                   Vocabulary List: Definitions, Part 2


 1. NATURAL EQUILIBRIUM (Chap 12): The population size that would persist in the absence of any outside influences.


 2. STABLE EQUILIBRIUM (Chap 12): An equilibrium where movements away from this population level set forces in motion to restore it.


 3. MINIMUM VIABLE POPULATION (Chap 12): A level of population below which growth in population are negative (i.e. population decreases to extinction).


 4. SUSTAINABLE YIELD (Chap 12): A catch level is sustainable when it equals the growth rate of the population.


 5. MAXIMUM SUSTAINABLE YIELD POPULATION (Chap 12): The population size that yields the maximum growth rate in population.


 6. STATIC EFFICIENT SUSTAINABLE YIELD (Chap 12): This is the catch level that maximizes the net benefits of the catch.


 7. CONTEMPORANEOUS EXTERNALITY (Chap 12): The over-commitment of resources to harvest an  open-access resource such as fish, a cost borne by the current generation of harvesters.


 8. INTERGENERATIONAL EXTERNALITY (Chap 12): Occurs when over-harvesting an open-access resource results in lower future stocks of the resource and consequently lower profits for future harvesters.


 9.  INDIVIDUAL TRANSFERABLE QUOTAS (Chap 12): A quota on the number of fish that can be taken from a fishery with the following characteristics: (1) The quotas entitle the holder to catch a specified weight of a specified type of fish (a kind of property right); (2) The total catch authorized by these quotas should be equal to the efficient catch for the fishery; (3) The quotas should be freely transferable among fishermen.







10. HIGH GRADING (Chap 12): When quotas specify the catch in terms of weight of a certain species but the value of the catch is determined by the size of the individual fish, fishermen have an incentive to throw back less valuable (smaller) fish, possibly resulting in a high mortality rate among smaller fish and a reduced stock of fish.


11. NEGLIGENCE (Chap 19): Given that defendants owe a duty to plaintiffs to exercise due care, defendants will be found in breach of this duty if they have taken less than the standard of due care and will be ordered to pay compensation for damages caused. If the defendant has observed a standard of due care then the victim/plaintiff bears the costs of the accident.


12. STRICT LIABILITY (Chap 19): Given that an activity causes damage, defendants are automatically liable for those damages even if they observed high degrees of due care.


13. DATED ASSURANCE BONDS (Chap 19): A bond posted as a necessary condition for disposing of hazardous waste. The amount posted would be equal to the amount necessary to repair or rehabilitate any environmental damage which might occur in a worst case scenario between the time at which the bond is posted and the time at which the bond is refunded.


14.  SUSTAINABILITY AS NON-DECLINING WELL-BEING (Chap 5): According to this view, resource use by previous generations should not exceed a level that would prevent subsequent generations from achieving a level of well-being at least as great as that enjoyed by the current generation. This implies that the value of the capital stock (natural plus physical) should not decline. (NOTE: This view is also known as the WEAK SUSTAINABILITY CRITERION.)


15. SUSTAINABILITY AS NON-DECLINING VALUE OF NATURAL CAPITAL (Chap 5): According to this view, the value of the remaining stock of natural capital should not decrease. The emphasis here on preserving natural capital assumes that there are limited substitution possibilities between natural and physical capital. (NOTE: This view is also known as the STRONG SUSTAINABILITY CRITERION.)




16. SUSTAINABILITY AS NON-DECLINING PHYSICAL SERVICE FLOWS FROM SELECTED RESOURCES (Chap 5): According to this view, the physical flows should be maintained rather than the simply maintaining the value of the aggregate resources. (NOTE: This view is also known as the ENVIRONMENTAL SUSTAINABILITY CRITERION.)


17. THE FULL COST PRINCIPLE (Chap 21): According to this principle, all users of environmental resources should pay their full cost. (NOTE: This requirement indicates that environmental protection should occur with INCENTIVE COMPATIBLE INSTITUTIONS.)


18. THE PROPERTY RIGHTS PRINCIPLE (Chap 21): According to this principle, local communities should have a property right over flora and fauna within their border.


19. THE STEADY STATE ECONOMY (Chap 21): This state us characterized by constant stocks of people and physical wealth maintained at some chosen, desirable level by a low rate of throughput.


20. THROUGHPUT (Chap 21): Flows of resources and energy which provide direct consumption benefits and replacement of depreciated capital.


21.          DALY’S CONCEPT OF A FORCED TRANSITION (Chap 21): Assumes      that current standards of living are unsustainable, thereby       

     requiring an immediate transition to a new, lower standard      

     of living in order to protect future generations. Also         

     assumes a “guided” forced transition will be less painful        

     than a laissez faire forced transition. (NOTE: Questions        

     about these assumptions?)