“The economic crisis is petty by comparison to the nature crunch. But they have the same cause.” This is how George Monbiot starts his article below. The comparison between the financial crisis may seem an unlikely one, but global warming and the resultant economic costs could also have a significant effect on the world economy.
|1.||Define the terms (i) external cost (ii) private cost (iii) social costs.|
|2.||Using diagrams as appropriate show the reasons why the market economy may fail to allocate scarce resources appropriately.|
|3.||“If the global economy keeps growing at 3% a year (or 1700% a century) it too will hit the wall.”. Discuss possible policies that may help prevent this situation arising.|