Climate change is a geographical phenomenon; it refers to changes in the distribution of climatic events, such as temperature or the likelihood of tornadoes. Why is it important for economists to study climate change?
What will be an ideal response?
Analyzing the economics of climate change is an important step in understanding how to mitigate the effects of climate change. This is because activities that potentially cause man-made climate change are economic in nature and relate to our production and consumption activities. Efforts to reduce man-made climate change will involve economically costly activities, and to determine how to do this optimally requires cost-benefit analysis. Whether we may be able to harness new technologies in order to avoid environmental risks without having to reduce our consumption and production significantly is also related to the economic analysis of technological change.
A-head: ECONOMICS OF CLIMATE CHANGE
Concept: Climate change
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The marginal propensity to import (mpi), where M = imports, is defined as
A) M * Y. B) ?M/?Y. C) M - Y. D) ?M * ?Y.
The terms of trade is defined as:
a. the quantity of inputs sacrificed to produce each unit of a good. b. the quantity of one good that is exchanged for a quantity of another good. c. the ratio of the total cost of production of individual traders. d. the marginal cost of producing one good as a percentage of the marginal cost of another good. e. the ratio of total exports of a nation to its total production.