Final Exam Review I Chesapeake Bay Physical Properties a Estuary partially enclosed body of water and its surrounding coastal habitats where saltwater from the ocean mixes with fresh water from rivers or streams i Unimpaired connection with ocean is reasonably dilluted ii Clean Water Act identifies Great Lakes as estuaries because they are similar in form and function iii Chesapeake Bay is a coastal plain estuary b Bay formation i Bolide meteor impact ii iii Drowned River Valley Ice Age more pollution c Watershed area to Bay volume very high watershed volume ratio which means d Drowned river valley type of estuary the bay is due to melted glaciers The water is shallow Average depth is 6 meters important because if sediment builds up the water quality decreases e Partially mixed estuary salt water from the Pacific Ocean mixes with fresh water from the bay which produces vertical salinity gradient i Vertical Salinity Gradient when salinity of surface waters differs from that of underlying waters usually have a zone in which salinity changes rapidly with depth f Water Circulation and mixing in the Bay is affected by i Coriolis force tides winds precipitation see Chesapeake Quarterly http www mdsg umd edu CQ v10n1 index html II g Chesapeake Bay Ecology a Eutrophication increased nutrients i Sources of increased nutrients are fertilizers manure and mobile ii Excessive growth of phytoplankton and macroalgae grazers cannot transmissions control growth 1 Large scale blooms block sun to SAV 2 Different species may dominate some harmful iii Eventually deplete nutrients and blooms die 1 Bacterial decomposition consumes oxygen 2 Parts of the Bay may become a Hypoxia less than 2 3 ppm dissolved oxygen b Anoxia no oxygen b Limiting Nutrients the needed nutrient organisms need nutrients in different ratios for growth and development i Phosphorus tends to be the limiting nutrient in freshwater systems where there is more nitrogen than plants can use so phosphorus stimulates growth 1 Most of the phosphorus applied to farms in the Chesapeake Bay watershed originated in Morocco ii Nitrogen tends to be the limiting nutrient in estuarine systems because there is more phosphorus than plants can use so nitrogen stimulates growth III c Sediment makes bay shallower less area for aquatic life Chesapeake Bay Restoration a Chesapeake Bay Program MD VA DC PA 1983 i Protect and improve living water and resources ii Study Credibility b Total Maximum Daily Load maximum amount of pollution water can receive and retain its water levels i Process 1 EPA determines where N P and S are coming from 2 Determines total allocation to meet water quality standards 3 Difference between 1 and 2 is reduction needed by area 4 States develop WIPs to meet goals c Chesapeake Bay Commission i Policy leader in Bay restoration ii Tri State legislative commission MD PA VA iii Congressional liaison iv 21 members 15 general assembly 3 governors 3 citizens d Chesapeake Bay Foundation Save the Bay i NOT the Chesapeake Bay Program ii Non profit non government environmental advocacy organization iii Restore educate advocate and litigate e Phosphate Ban 1985 banned laundry and other detergents required sewage treatment to reduce their effluent i End of pipe outlets cheap detergent reformulated lowered treatment cost for Phosphate f The 2011 Bay Health was D this is due to i Spring rains more nitrogen phosphorus and sediment washed in ii Hot dry summer low mixing promote algae in fresh surface anoxic bottom water iii Wind mixed oxygen levels iv Sediment and Dry hot summer conditions IV Economic Concepts a Value willingness to pay i Efficiency getting the most using the least ii Time how much to leave for later iii Equity equality across customers iv Willingness to accept lowest amount you are willing to accept to give v Willingness to pay same as willingness to accept except it is constricted something up by income b Supply and Demand i Supply price increases as quantity increases same direction ii Demand price decreases as demand quantity increases iii Supply and price always move in the same direction iv Supply slope curves up 1 Taking into account the cost of the externality shifts the supply curve up v Cost to produce cost to sell revenue vi Total revenue price x quantity c Consumer and producer surplus i Surplus total revenue cost ii Consumer Surplus value cost iii Producer Surplus revenue TC total cost to produce up to net efficiency 1 base x height of a triangle or length x width of rectangle iv Net benefits consumer surplus producer surplus d Property Rights bundle of entitlements defining the owner s rights privileges and limitations for use of the resource solution to problems that come from public goods i Chesapeake Bay does NOT have these e Externalities a spillover that is incurred by a 3rd party who was not involved in a transaction between a buyer and a seller when the welfare of an agent depends directly upon his her activity and on activity under the control of some other agent i Can be positive or negative 1 Negative output too large price too low pollution too high a Example cost of chickens chickens are small so you need a lot of them to get what you want out of them which causes more pollution for a low price 2 Positive output too small price too high number of views too small a Example small farms too expensive but do not put out as much pollution They do not put out as many goods as a large farm therefore not helping society grow but they are emoting less pollution making them positive ii Example if your roommate plays really loud music he benefits enjoyment but you cannot study negative externality iii Now there are no property rights so anyone can pollute the bay but if they implemented property rights this would be a solution to externality f Common Property varying property rights subcategory of open access inefficient unless there is no scarcity i Open access non excludable but rival ii Example of fisheries 1 Fewer fish are obtained with the same amount of resources marginal cost increases 2 Other fishermen do not factor in the externality of Stock depletion lower stock becomes more expensive to catch 3 Cost increase same amount of fish g Open Access too big to be managed example open water fishing h Public Goods goods that benefit the whole public wetlands conservation water cleanups indivisible and non excludable i Pareto efficiency optimality i Pareto improvement a change in conditions policy allocation of