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164 • Microeconomicsimportance of healthy wetlands and barrier islands that reduce stormsurges and a stable climate that reduces hurricane strength may havehigher marginal utility for the poor than the rich, as the former wereforced to ride out the storm, while the latter were able to flee. Even foodbought by the poor has low marginal utility if the poor are being chokedby poisonous air and fried by UV radiation.Microeconomics is a big subject, and this section could turn into abook by itself. We have not tried to cover the whole topic but rather to explainthe basic grammar of markets, why markets are efficient, and whatconditions have to hold for markets to be efficient (and by implicationwhat might possibly go wrong) and to give the rudiments of supply-anddemandanalysis. We have also tried to point out the places where wethink the ecological economics perspective improves microeconomics. Wewill now focus our attention more directly on N, the goods and servicesprovided by nature, to determine how well they meet the criteria for efficientallocation by market forces.BIG IDEAS to remember■■■■■■Shift in the supply or demandcurve versus movement alongthe curveShortage, surplus,equilibriumConsumer surplusProducer surplus, rentElasticityComplementarity andsubstitutability■■■■■■■Production functionUtility functionDiminishing marginal utilityDiminishing marginalphysical productProduction as transformationFitness of the environmentNatural capital’s role in bothutility and productionfunctions