Exam 1 redo

Pick 5 Ecosystem Services from the list in slide13of the topic called Intro to some key concepts of Economics.
1. Mitigation of floods and drought.
2. Detoxification and decomposition of waste.
3. Purification of air and water.
4. Dispersion of seeds.
5. Pollination of natural vegetation and crops.
For each of your 5 ecosystem services, please explain how each is supposed to work. 
1. Dispersion of seeds
Seed dispersion takes place in various ways but the common ways are water, animal, wind, and explosion.
a. Wind: some plants and fruits have hair on their surface that serve as wings to allow them to be carried away by the wind to new locations.
b. Water: Some plants and fruits float on water. When such plants or fruits fall in the water, they are carried for long distances to germinate miles away from their point of production. For instance, water lily seeds.
c. Animals: Some animals eat fruits around them. after eating the fruits, only the juicy part of the fruit is dispersed while the seeds are dispersed in form of droppings far away from the point of consumption. Other fruits have fur on their surface. Such fruits get hooked on animals’ bodies and carried to other locations.
d. Explosion: Some plants have their fruits contained in pods. When the pods explode, the seeds are thrown far from their plants.
2. Purification of air and water
· Water: As water flows through multiple forests and wetlands, it is filtered to eliminate most of the pollutants. The natural flow of water breaks down unwanted components.
· Air: Various components of our environment such as trees, soil, and wetlands purify the air we use. For example, plants take in carbon dioxide to release pure oxygen for human beings.
3. Pollination of natural vegetation and crops
· A large percentage of our crops depend on insects that collect nectar and pollen grains and pollinate them during the process.
· Natural vegetation implies all other plants that do not include human help such as grasslands, forests, and rainforests. Such vegetation also needs pollination.
4. Detoxification and decomposition of waste
· Various decomposers such as earthworms, fungi, and slugs detoxify and decompose different forms of waste in our ecosystem. The decomposition and detoxification return waste into useful forms such as nutrients that can be reused by different organisms.
5. Mitigation of floods and drought
· Forests help in preventing floods because they slow down the speed of rainwater.
· On the other hand, wetlands provide a source of water hence preventing drought.
please thoroughly explain at least one human behavior that has disrupted the operation of the service
1. Mitigation of floods and drought.
· Overpopulation and destruction of forests.
2. Detoxification and decomposition of waste.
· Littering has affected this because human beings dispose materials that cannot be decomposed.
3. Purification of air and water.
· Through deforestation.
· Through landscape modification.
· Through the effects of runoff pesticides.
4. Dispersion of seeds.
· Elimination of natural vegetation to create space for commercial activities.
· Through landscape modification.
5. Pollination of natural vegetation and crops.
· Different species of pollinating insects have been endangered.
· Clearing of natural vegetation.
For each of your 5 Ecosystem Services, explain how the disruptions to the Ecosystem Service impact the two different parts of the world
1. Global north

2. Global south
2. There are 17 Rare Earth Elements. Pick any 5of them, and for EACH of the 5, explain in detail why they are so critical to us
i. List of the 5 elements
· Terbium
· Neodymium
· Zirconium
· Dysprosium
· Promethium
ii. Why each element is so critical to us?
1. Neodymium
· The resource is found in China, Australia, Brazil, and the USA. It is about 60 parts per million.
· It is a vital resource for the production of a magnet and especially the strongest magnets on earth.
· It is mixed with boron and iron to produced NIB magnets that are used in cell phones, computers, motors, medical equipment, and audio systems.
· It is vital for the production of renewable energy devices.
2. Terbium
· Terbium is found in Brazil, India, the USA, China, Australia, and Sri Lanka. It is approximately 0.08 parts per million.
· It is used to make electronic devices such as music players and cellphones.
· It is used to make alloys.
· It serves as a dopant in calcium tungstate, calcium fluoride, and strontium molybdate.
· It is used to improve the safety of X-ray devices.
· It is used in the creation of electric characteristics in electronic devices that are extremely relied on by most people in the world.
3. Dysprosium
· The elements present in the earth’s crust are 0.00042 percent by weight.. it is found in Australia, China, India, Russia, and the USA.
· It is used in nuclear reactors because of its ability to reduce fission and absorb excess neutrons.
· It is crucial for the production of wind turbines and cars.
· It is used to serve as heat-resistant in nuclear reactors.
· Used to minimize the effects of radioactive reactions.
4. Zirconium
· The resource is found in Brazil, South Africa, and Australia. It exists as 165 parts per million by earth’s crust weight.
· Most applied in corrosive conditions.
· Used to produce building materials that are vital for the economy.
· Used to produce surgical equipment.
· Used to produce pipes that are critical infrastructure in the economy.
· Used in heat exchangers.
5. Promethium
· The resource is found in the earth’s crust. It is not found in observable amounts.
· Used in research processes to determine safety and limits for different processes.
· Used to produce atomic batteries that serve pacemakers and guided missiles.
· Pacemakers improve the quality of life for different people and that is vital for our economy.
iii. For each of the 5, please explain 3things we need to start doing today to avoid running out of that resource
1. Terbium
· Limits its use to necessities.
· Recycle spoiled devices that use them.
· Use alternatives such as Arsenic and Boron
2. Neodymium

· We should recycle computers, cellphones, and other devices that use them.
· Promote reusing and reselling of devices that use the resource by giving discounts,
· Use alternative resources when necessary to avoid depletion of these rare resources.

3. Zirconium
· Implement tough laws of utilization.
· Recycle brick, pipes, and ceramics to avoid depleting the resource.
· Use alternatives to prolong its existence.
4. Dysprosium

· Rise the price of the commodity to protect it.
· Substitute it with other elements such as Cerium.
· Find a way to optimize the available resource.
5. Promethium
· Implementation of strict usage laws.
· Use cheaper and readily available resources such as tritium
· Recycle the existing elements in devices and laboratories.
The theory of rational behavior says that we humans act in our own self-interest.   Given our actual behavior and the decisions we have made and are continuing to make relative to the planet.
i. What does over-pumping of aquifers really mean? Is continued over-pumping of aquifers around the world in our best interest? If yes, explain why. If no, explain why not. Please provide thorough explanations.
Aquifers refer to layers of underground rocks that are permeable and have can hold water. Both gases and liquids can pass through them. Aquifers can exist as fossils or rechargeable. Over pumping of aquifers implies that people are over extracting water from aquifers. The process causes exhaustion of water resources leading to the problem of salt intrusion that harms the quality of water.
ii. Explain how the continued over-pumping of aquifers in America, China, and India, could impact our ability to survive on the planet. This will require that you find out what things these 3 nations have in common that are related to aquifers. Connect the dots and explain how our ability to survive on the planet could be impacted by continued over-pumping of aquifers.  Please provide plenty of detail here.
· China, America, and India are the leading grain producers in the world. These countries have deep-seated fossil aquifers whose depletion threatens human existence because fossil aquifers are non-rechargeable. This threat implies that the three countries are in great danger of running out of their water reserves. Therefore, if the countries continue to overpump, they will lack sufficient water to sustain their needs. The countries will also be unable to support their grain production which is a serious economic threat. Most people in these countries will lose their jobs. Lastly, different parts of the world will experience food shortages.
iii. Explain in detail 3 things we can do to stop the over-pumping problem. In your explanation, please talk about how your suggestion would actually lead to solution of the problem.
Since the main activities that consume water are thermoelectric power and agriculture activities, the following should be done to prevent over-pumping of aquifers.
· Construct dams. Constructing dams will increase water for agriculture and thermoelectric activities. Availability of water for such needs will reduce the need for over-pumping. More dams will reduce floods and increase the effectiveness of water collection without relying on aquifers.
· Implement more pipeline programs. If we install more pipeline systems that collect water from the mountains and uphill streams, we can eliminate the problem of water and avoid exploiting aquifers. Such a program would collect a significant amount of water for agricultural purposes.
· Regulate agricultural practices. The three countries are struggling because of over-pumping aquifers. If the countries were to put in place to regulate agriculture, they would preserve their aquifers by reducing over-pumping.
Utility concepts
Explain the 3concepts: Utility, Marginal Utility, and Diminishing Marginal Utility

· Utility-utility refers to the pleasure or satisfaction one derives from a product or service. The concept of utility applies to both individuals and organizations. However, it differs depending on usefulness, difficulty to quantify and please desired.
· Marginal utility-marginal utility refers to the increase in the utility as a result of consuming one additional unit of a commodity or service. In other words, it is the extra satisfaction one gets from consuming one extra unit.
· Diminishing marginal utility-This concept explains the number of successive units of a good or service one consumes the less and less marginal utility retrieved.
Provide an explanation of 2examples of each of those 3concepts as they might be applied to the Keystone XL Pipeline project
i. Utility
· The satisfaction that would be derived from the pipeline project can be job creation. More people will have jobs to sustain their needs and their dependents.
· From the pipeline project, more people will benefit from economic growth. Economic growth will allow more people to consume more of their favorable commodities.
ii. Marginal utility
· Although the pipeline is not important, it would give people extra satisfaction by delivering more oil and making extra money.
· The project would also give people an extra number of jobs. Each extra distance covered by the project would give people extra jobs.
iii. Diminishing marginal utility
· Although the pipeline project will give people more jobs, it will cut industry jobs that pay minimum wage. However, it will cause more pollution.
· Although the project is good for society, the more it is implemented the more we will have issues of human rights from labor unions.
The Theory of Consumer Behavior
Explain EACH of the key assumptions of the Theory of Consumer Behavior and what the theory tells us.
i. Rational behavior
· The concept is based on the idea that human behavior reflects self-interest. It assumes that people act in their best interest without giving other people’s needs a priority.
· It implies that we want to increase and maximize our utility.
ii. Preferences
· Human beings have needs that have to be satisfied. To meet these needs, they have to prioritize them according to their needs. The most preferred need is given priority.
iii. Budget constraint
· human consumption behavior is dictated by their income. People make their consumption decisions based on their income. If one has more income they will purchase more goods.
· Due to budget constraints, people use the concept of opportunity cost to determine what to purchase and what can wait to be bought in the future.
iv. Prices
· This concept states that prices do not show the real cost of production.
· For example, if gas prices were to reflect the real cost, they would cost 15 dollars per gallon.
· However, this is not possible due to the misallocation of resources.
· If the price is less than the cost of production people will buy more of it.
· On the other hand, if the cost price is more, people will purchase less of it because they don’t feel like they are getting the real value of the product.
v. Income changing
· If people’s income increases, they tend to purchase more luxurious commodities and maintain the consumption of necessities.
· If peoples’ income decreases, they will reduce their consumption of luxuries and concentrate on necessities.
Does the theory of consumer behavior reflect reality? 
· No, the theory does not reflect the truth because it is based on assumptions. One, the theory assumes that all consumers are guided by rationality.
· The theory assumes that all people are economic agents who act in their best interest. This is not true because sometimes we end up harming ourselves.
Marginal analysis is a decision-making tool
i. Please define Marginal Cost
· The term marginal means extra. Therefore, marginal cost refers to the additional cost resulting from producing one extra unit of a product or service.
ii. Please define Marginal Benefit
· Marginal benefit refers to the additional benefit obtained from the consumption of one extra unit of a commodity or service.
Explain thefollowing3 cases in terms of what you should do regarding the activity involved. Should we do more of the activity, less of the activity, or keep doing the same? Explain why in each case.
· The three scenarios represent a situation where one decides whether to work overtime or not to work overtime.
a. MB>MC
· This is a situation where the benefit of working overtime exceeds the benefit of having free time to spend with friends, family, or enjoying leisure.
· In this situation, one will choose to work overtime and enjoy more benefits.
b. MC>MB
· This is a situation where working overtime is less beneficial than having free time. In a situation like this, one would like to forego working overtime so that they can have enough time for school work.
· The cost of losing time for studies is higher than having mover money through working overtime.
c. MC=MB
· In this situation, both the marginal cost of losing time and the benefit of having working overtime are equal.
· If the time scheduled for overtime does not interrupt study time, one can work to gain more money.
· If the time scheduled for school does not interrupt overtime working, one can study and have more benefits of studying.
Explain 3 examples of MC and 3 examples of MB related to the Keystone XL Pipeline question.
1. MC- This represents the cost kinked with producing one more unit of a product or service.
· The cost of transporting oil from mining sites to the refinery would be less because a pipeline is efficient.
· The labor would be reduced significantly because the pipeline is less costly.
· The average cost of a barrel of oil will reduce because of the economies of scale.
2. MB-Benefit associated with consuming one extra unit of a product or service.

· The project’s marginal benefit would be job creation.
· Another benefit would be better transportation safety.
· Lastly, there would be increased returns.
The objective of this question is to help you understand and apply the various concepts related to the Production Possibility Model.  
1. Please explain what the model teaches us
· The production possibilities model shows the tradeoff and possible output using certain limited outputs.
· The model shows efficiency.
2. Please explain each of the 4 assumptions of the model
· The assumes full employment and production. The assumption implies that all available resources are fully utilized. The assumption, therefore, assumes both allocative and productive efficiency.
· The model assumes fixed resources where people work with what they have and they cannot get more than that.
· Fixed technology where people cannot introduce new technology during the production process.
· The mode assumes that the model has two goods and you have to give up one to enjoy more of the other good. If you want to produce more of one, the other has to be sacrificed.

3. Please explain Productive Efficiency and how it relates to the PPC
· Productive efficiency is achieved when the model comes to full production and employment in the PPM.
· Efficiency exists when a mix of two goods includes the least cost.
· At the point of productive efficiency, both the goods cost the least.
Please explain Allocative Efficiency and provide a thorough explanation of the 2-step process for finding the point of allocative efficiency on the PPC
· Allocative efficiency refers to the least production cost for a set of outputs required by society.
· The set includes one good and service.
· In such a model, allocative efficiency is achieved when marginal cost equals marginal benefit.
· To find allocative efficiency we compare different points of marginal benefits and marginal costs.
· The second step is to find corresponding quantities for each good.
On the topic of Economic growth: need to see some detail here
i. What does it mean?
· Economic growth is the ability to produce more total output than the previous time.
· To achieve economic growth you have to adjust conditions to produce more.
ii. How can it be graphically represented?
· Economic growth can be presented graphically as a rightward shift in the PPC
· The shift shows growth through the expansion of values.
iii. What are the prerequisites to Economic growth?
· Technological development
· Improved resource quality
· Increased supply of resources.
iv. GDP growth rates for the past 60 years show a steady downward trend. Explain why you should care about that
· This is a concern because it implies that the economy is performing poorly. This trend shows that there will be devastating effects of the poor economy.
v. Why is Economic growth good for you and your country?
· Economic growth advances vital amenities and the provision of basic resources to individuals and a country at large.
· Economic growth attracts more opportunities from other parts of the world.
vi. Why is economic growth bad for you and your country
· Economic growth creates negative externalities in society such as air and noise pollution.
Please provide a thorough explanation of 3 factors that would tend to limit economic growth
i. Illiteracy
· A country cannot have economic growth without skilled labor.
ii. Unnecessary government intervention
· Scare potential investors through high taxes.
iii. Political instability.
· Does not support the development of critical infrastructure.
· People are uncertain and do not want to invest.

The Presentville –Futureville case
i. Explain what motivated each group to make the decisions they made
· The presentville were impatient so they decided to use their present goods for instant gratification.
· The futureville were patient so they decided to hold their present goods so that they can make more in the future.
ii. Explain the impact of those decisions on the future of each group
· Presentville will suffer in future because they have used all their goods without minding about the future.
· Futureville will have more benefits in the future because they held on to their goods so that they can make more.
iii. .Which group is most like America, and why?
· Presentville is most likely to be the American society because most Americans use all their resources without regard for their future.
iv. What does this story teach you?
· We should be efficient in our resource allocation to avoid allocating all that we have to our instant needs without considering the future.
of increasing opportunity cost:
i. Explain it
· For us to produce more of a given good, we must sacrifice the production of another one.
ii. What does it teach us?
· From this concept, we learn that we live in a world of scarce resources and our outputs have to be prioritized.
iii. How could it be explained graphically?
· This can be explained using a production possibilities curve.
· As we move down the curve, additional units of one resource lead to the decrease of the other good.
· During the coronavirus pandemic, resources required for other sectors were significantly reduced to increase resources in the health sector.
The Circular Flow Model with Government is another important model for students to understand.
i. Please explain what the model shows us
· The model shows us how resources are exchanged between households, government, business, and the product market. The model also highlights how the parties relate in an economy.
ii. List and explain at least 3 of the characteristics of each component–be very thorough and provide plenty of detail!
1. Government
· Takes takes from the model as a form of revenue.
· The government purchases from the product market.
· Gets resources from the product market in the form of land, labor, and capital.
· Provides legal framework through legislation.
2. Household
· Gets income from profit, wages, interest, and rent.
· Income is unbalanced among the households so they have varying consumption habits.
3. sector
· Represents firms, plants, that produce both household and government goods.
· The business sector gives goods and services in exchange for money.

Every country has its own unique type of Economic System
i. Please list and explain5 “good” things Capitalism has produced for us over the years
· Increased incentives to the money because more opportunities exist. Such markets have less government intervention to allow innovation and creativity.
· Improved efficiencies. Better efficiency roots out poor goods and services in the market.
· Freedom of choice among customers. Capitalism allows customers to choose from their favorite sellers. The freedom creates competition in the market.
· Reduces government intervention. Capitalism reduces government intervention to allow allocation of resources to take place according to the market forces.
· Capitalism triggers economic growth. Most capitalist countries are free markets with stiff competition for economic growth.
Please list and explain5 “bad” things Capitalism has produced for us over the years.
· Creation of monopolies. Competition in the market allows bigger firms to dominate and control the market.
· Capitalism creates low wages in the market because employers are few and employees are many.
· Capitalism leads to negative effects on the environment. Investors focus on maximizing profits without minding their effects on the environment.
· Capitalism creates inequality in the market. The gap between different people in the market widens because those who have to increase their chances of having more.
· Capitalism creates a market bubble because owners of resources adjust the prices even when the conditions are not favorable.
 Please explain in detail what would happen to our capitalist system when these two conditions are absent and explain why we would expect to see those results. 
· Shortage of resources exists because their allocation is not fair. In such a situation, the government intervenes to regulate the allocation of resources making capitalism ineffective.
List and thoroughly and completely explain those 4 fundamental questions and how they are answered
i. What will be produced?
· You have to answer this question because customers should be targeted with the right goods and services. Unless you produce the right goods and services you cannot stay in a competitive market.
ii. How will the goods and services be produced?
· Before producing goods and services you should find a suitable way of production. The process of production should be cost-effective to ensure you make profits.
iii. Who will get the goods and services?
iv. Before goods and services are produced, you should have a certain group of people that acts as your market. The group has to be analyzed to determine their needs and the best way of fulfilling them.
v. How will the system accommodate change?
· when starting the process of production you should expect some changes. Such changes affect production and they should be accommodated appropriately to sustain effective production.
For each of the following issues, please explain in detail, why they are important to a firm and how a firm might address each one(need to see the detail here
i. Optimal plant location
· This is important because a firm wants to spend the least amount of money when distributing goods, and want to have their firm in a place where their target market is nearby so people will buy
ii. Resource Prices
· This is important again because a firm wants to be in a location that has lower resource prices like wood or wages
iii. Resource Productivity
· This is important because firm’s want to get their money’s worth, so they need to hire efficient workers and have good production inputs.

iv. Transportation Costs
· This is important to firms because they don’t want to be spending extra money on transporting goods and services
Who will get the goods and services? 
· Whoever gets the goods and services is determined by a rationing function to determine the equilibrium prices. This implies, that higher prices attract fewer buyers while low prices attract more buyers.
How will the system accommodate change? Be thorough! read the slides and listen to the lecture, then start writing
· If the equilibrium is shaken to disequilibrium, the market system will adjust itself to return to equilibrium. If the system is a free market, the forces will take charge to readjust itself.
Characteristics of the Market system
· Select any 5 of the characteristics of the market system that we covered, and explain each of them.
i. Private property
· Owned by individuals and businesses, not the government
ii. Property right.
· Encourage investment, innovation, exchange, and maintenance of the property

iii. Freedom of choice
· The property owner can do what they want with their property
iv. Self-interest

· Motivation force is to maximize profits, minimize losses
v. Active but limited government
· Establish and maintain the legal system to facilitate economic activity

· Explain how each characteristic you selected impacts the 1% versus the 99%

i. Every characteristic favors 1 percent of the. The percentage will always have enough resources to secure what they want.
ii. The other percentage does not have sufficient resources to secure benefits such as healthcare. The percentage does not possess property to influence the decisions of the 1 percent.