ABSTRACT
A 2017 opinion poll asked Americans which should be given the higher priority: economic growth or protecting the environment. By 56 percent to 35 percent, more people thought that environmental protection should be given the higher priority. Environmental issues are certainly not separate from economics. Poor environmental quality affects important aspects of well-being. Deteriorating environmental conditions can create serious health problems, as well as reduce the quantity and quality of natural resources that contribute to productivity. Supply-and-demand curves are expressed in monetary units. So in order to incorporate externalities into the supply-and-demand model, they also need to be measured in dollars. Externalities can also be positive, meaning that an economic transaction positively affects those outside the market. One example is a homeowner who installs solar panels on his or her house. Society as a whole benefits because the solar panels reduce the need for generating electricity from fossil fuels, thus improving air quality and reducing other ecological damages.
