Question 1

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

Accepted Answer

Neoclassical economists view biophysical limits as a constraint on economic growth that can be overcome through factor substitution, where resources facing scarcity can be replaced with substitutes that are more abundant or more efficient.

Question 2

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

Accepted Answer

The use of 'global commons', such as natural resources, has contributed to scarcity and thus led to the development of the new scarcity paradigm.

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.

Accepted Answer

The statement is incorrect. Herman Daly's pioneering work on a theoretical model of a sustainable economy with an explicit account of biophysical limits goes back to the 1970s.

Question 4

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

Accepted Answer

The Brundtland Commission Report defined sustainable development as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

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.

Accepted Answer

The Brundtland Commission Report's definition of sustainable development includes economic, environmental, and social considerations, which aligns with both neoclassical and ecological frameworks for sustainability. Therefore, the statement is true.

Question 6

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

Accepted Answer

The Brundtland Commission Report defines sustainability as "meeting the needs of the present without compromising the ability of future generations to meet their own needs" which implies an intergenerational equity and ethical responsibility.

Question 7

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

Accepted Answer

The Brundtland Commission Report definition of sustainable development emphasizes balancing economic, social, and environmental factors, rather than measuring development solely through increases in production.

Question 8

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

Accepted Answer

The answer of With neoclassical economics, one is principally concerning...

Question 9

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

Accepted Answer

The neoclassical approach often assumes that human-made capital can substitute for natural capital, implying that natural capital is not a strict 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.

Accepted Answer

Neoclassical economics' variation of sustainability, referred to as weak sustainability, posits that natural capital can be substituted by human-made capital, rather than viewing natural capital as an absolute necessity.

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.

Accepted Answer

The Hartwick sustainability rule suggests that constant real consumption can be maintained despite exhaustible resources if the revenues generated from the depletion of these resources are invested in other forms of capital, such as human or natural capital. This ensures that overall capital remains constant, allowing for sustainable consumption in the long run.

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.

Accepted Answer

Weak sustainability assumes that different types of capital stocks are interchangeable to some degree, allowing for flexibility within the economy.

Question 13

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

Accepted Answer

With weak sustainability, the transfer of the capital stock from one generation to the next can be in any form, including natural capital substitutes, such as human-made or produced capital.

Question 14

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

Accepted Answer

The ecological approach to sustainability emphasizes the importance of preserving natural capital, which is the stock of natural resources and environmental services that support human life and economic activity. Therefore, it assumes that natural capital will be the limiting factor in achieving sustainability.

Question 15

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

Accepted Answer

The safe minimum standard approach focuses on avoiding irreversible harm to the environment, prioritizing conservation, whereas the neoclassical approach to sustainability emphasizes cost-benefit analysis and economic efficiency, potentially allowing for environmental degradation if the benefits outweigh the costs.

Question 16

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

Accepted Answer

This definition of income is associated with John Hicks, a British economist, who proposed that income should be defined as the maximum amount that an individual can consume during a period without reducing their ability to consume the same amount in future periods. This concept emphasizes maintaining capital intact to ensure sustainable consumption over time.

Question 17

The safe minimum standard approach …

Accepted Answer

The safe minimum standard approach incorporates elements from both neo-classical economics, which often emphasizes market-based solutions and efficiency, and ecological economics, which focuses on sustainability and the value of natural capital. This approach seeks a balance between economic development and environmental conservation, acknowledging insights from both disciplines.

Question 18

The neo-classical approach generally assumes that ...

Accepted Answer

The neo-classical approach assumes that resources are substitutable, meaning that if one resource becomes scarce, it can be replaced by another resource or technology. This assumption underlies many economic models and policies aimed at promoting economic growth and development.

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?

Accepted Answer

The answer of In which of the following ways does...

Question 20

Which of the following statements about strong sustainability is correct?

Accepted Answer

Strong sustainability emphasizes the need for government intervention to protect natural resources and ensure their sustainable use, recognizing that the market alone may not adequately safeguard environmental values or ensure equitable access to resources.

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

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

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

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.

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

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.

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

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

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

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

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.

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

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

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

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

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

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

The safe minimum standard approach …

The neo-classical approach generally assumes that ...

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?

Which of the following statements about strong sustainability is correct?