Deck 12: Biophysical Limits to Economic Growth: the Neoclassical Perspective

Question 1

For neoclassical economists, it is best to understand the association between biophysical
limits and economic growth through factor substitution.

Answer 1

True

Question 2

The new scarcity paradigm came about, in part, because the scarcity problem resulted
from the use of 'global commons'.

Answer 2

True

Question 3

The earliest attempt to construct a theoretical model of a sustainable economy with an
explicit account of biophysical limits traces its roots to Herman Daly in 2007.

Answer 3

False

Question 4

The Brundtland Commission Report attempted to define sustainable development as
development which meets the needs of the future.

Question 5

The Brundtland Commission Report definition of sustainable development is consistent
with the theoretical frameworks for sustainability developed by followers of both the
neoclassical and ecological schools of economics.

Question 6

The Brundtland Commission Report definition of sustainability has a very strong ethical
component.

Question 7

The Brundtland Commission Report definition of sustainable development implies that
development is measured through increases in the production of goods and services.

Question 8

With neoclassical economics, one is principally concerning with the sustainability of the
consumption of goods and services.

Question 9

The neoclassical approach to sustainability assumes that natural capital is a nonbinding
constraint on sustainability.

Question 10

The neoclassical economics variation of sustainability is most commonly referred to as
weak sustainability because it renders natural capital as an absolute necessity for
sustaining net national income.

Question 11

The Hartwick sustainability rule states that maintaining constant real consumption of
goods and services is possible even in the presence of exhaustible resources.

Question 12

Weak sustainability allows an economy a great deal of flexibility since the various types
of capital stocks are considered to be close substitutes.

Question 13

With weak sustainability, the transfer of the capital stock from one generation to the next
can be in any form.

Question 14

The ecological approach to sustainability assumes that natural capital will be the limiting
factor.

Question 15

The safe minimum standard approach in practice really mimics the neoclassical approach
to sustainability.

Question 16

When income is defined as that amount which can be spent while keeping capital intact, then which of the following are correct?

A) This is a Hicksian definition.
B) This is an ecological economics definition.
C) This is neoclassical definition.
D) This is a neo-Malthusain definition.
E) None of the above.

Question 17

The safe minimum standard approach …

A) Advocates strong sustainability.
B) Advocates weak sustainability.
C) Has elements of both the neo-classical and ecological economics approaches.
D) Is defined in the Brundtland Commission Report.
E) None of the above.

Question 18

The neo-classical approach generally assumes that ...

A) Thomas Malthus is correct.
B) Neo-Malthusians are correct.
C) Resources are substitutable.
D) Resources are not substitutable.
E) Ecosystem services are a limiting factor to sustainability.

Question 19

In which of the following ways does the safe minimum standard (SMS) approach to sustainability does not invalidate the standard economics approach to resource assessment and management?

A) SMS narrows the applicability of the standard economics conception of
sustainability.
B) Social opportunity costs could be assessed by using standard cost-benefit
analysis.
C) The SMS approach adheres to the notion of limits in substitution possibilities
between human and natural capital.
D) Both a and b .
E) Both a and c .

Question 20

Which of the following statements about strong sustainability is correct?

A) Strong sustainability and weak sustainability are equal in outcomes.
B) Strong sustainability is assumed by neo-classical economists.
C) Strong sustainability assumes that natural and man-made resources are substitutable.
D) Strong sustainability can be achieved via the free market.
E) Strong sustainability can be achieved with government intervention in the markets.

Question 21

A 'general' rule of sustainability criterion is to achieve which of the following?

A) Constant real consumption of goods and services.
B) The presence of exhaustible resources.
C) Renewable capital assets.
D) Constant GDP growth rate.
E) All of the above.

Question 22

Which one of the following statements best describes a difference between weak and strong sustainability?

A) Strong, but not weak sustainability would maximize human welfare over time
B) There is no difference between strong and weak sustainability when one speaks of the
Substitutability of human capital for natural capital
C) Weak, but not strong sustainability would likely maintain the stocks of natural capital
D) Weak, but not strong sustainability would likely require government involvement
E) Weak sustainability is a Malthusian concept.

Question 23

Figure A
-Refer to Figure A. Which of the following is correct?

A) A move from point G to point H would be desirable on efficiency grounds.
B) A move from point G to point H entails a higher level of income to future generations.
C) A move from point I to point J entails a higher level of income to future generations.
D) A move from point G to point I entails a similar level of income to future generations.
E) None of the above.

Question 24

Figure A
-Refer to Figure A. Which of the following moves would benefit at least one of the generations without affecting the well being of the other generation?

A) A move from point G to point I.
B) A move from point G to point J.
C) A move from point G to any point between I and J.
D) None of these moves would benefit at least one of the generations without affecting the
well being of the other generation.
E) All of these moves would benefit at least one of the generations without affecting the
well being of the other generation.

Question 25

Figure A
-Refer to Figure A. Which of the following is correct concerning a move from point G to point H?

A) The move entails a higher level of income to future generations.
B) It implies a tradeoff between intergenerational efficiency and equity.
C) The move entails a lower level of income to the current generation.
D) The move ensures that everyone is better off.
E) The move ensures that everyone is worse off.