if optimal choices are to be made, information on the economic value of environmental goods and services is therefore important for people to make decisions affecting the environment. Unless the full range of costs and benefits of projects (including their impact on the environment) is fully accounted for, comparisons, between options can not be made fairly. Bad projects may be chosen, and good projects will not fair consideration.Basic principles that determine economic values.to the economist, scarcity is what imparts values to a good or service. Where a market for the good or service exists, its scarcity is measured by its price . A market is where the supply of product or service confronts the demand for it. Market prices are established through the exchange of goods and/or services in the marketplace, in other words, an interaction of producer values (supply) and consumer values (demand).in a theoretically 'efficient' market - that is, one that is highly competitive, with many buyers and sellers, all or whom have perfect information about the market - goods and services will be priced at their marginal value product and reflect the full opportunity cost of resource use. An efficient price is achieved when the price clears the market so that demand is equal to supply, where efficiency implies that the net benefit to society from resource use is maximized.
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