State the difference between GDP and GPI Which one accounts for the true cost, environmental science homework help

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1. Capitalist market systems operate according to neoclassical economics: supply/demand. Explain how the assumptions of neoclassical economics contribute to environmental degradation. (2 pts)

2.State the difference between GDP and GPI? Which one accounts for the true cost? (1 pt.)

3. Define environmental policy and discuss the contributions of science, ethics, and economics towards formulating environmental policy. (3 pts)

4. Describe the three major approaches to environmental policy. (2)

5. A. If Canada has stricter laws for environmental protection than Mexico, and if these laws limit Mexico’s ability to export its goods to Canada, then by WTO policy Canada’s laws could be overruled in the name of free trade. Do you think this is fair? (1 pt)

B. Now consider that Canada is wealthier than Mexico and that Mexico could use an economic boost. Does this affect how you would respond? (1 pt)

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Dangers of Neoclassical Economics
Neoclassical economics has profound implication on the environment leading to its
degradation through the four fundamental assumptions.
1. Resources are infinite or substitutable. This assumption indicates that there are limited
resources. This assumption is not true since resources cannot run out as there are
substitute for such resources. There has been transition in the labor market moving from
manual labor to animal labor, the steam-driven power and then the fossil fuel power
which is in current use. There has been emphasis on renewable power in the recent past
which acts as the alternative to the exhausted original resource (Marshall and Alfred, 45)
2. The neoclassical assumes that costs and benefits are internal between the buyer and
seller. However, there are very externalities that lead to the environment and harm life yet
they are not put into account. This negatively affects the environment as it may be
degraded without measures put into place (Marshall and Alfred, 46).
3. Future effects should be discounted.
This assumption states that the future effects for the current actions are irrelevant. Thus,
people should only care for the future generations or the health of the planet. This leads

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to developments that are not sustainable in the long run hence contributing to
environmental degradation (Marshall and Alfred, 49).
4. Finally, the neoclassical economics assumes that economic growth is good and this
growth is reflected in the production and consumption of goods and services. However,
constant growth heightens the gap between the rich and the poor. Essentially, stability is
vital compared to growth in the long run. The more the growth, the higher the raw
materials are consumed and the more waste is generated which ends up in the
environment (Marshall and Alfred, 49).
Difference between GDP and GPI
Gross Domestic Product represents the overall production of goods ...


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