Reference no: EM131067184
In the 1970's a popular governmental policy designed to reduce the negative externalities associated with air pollution was regulation. Governmental policy eventually evolved to "cap-and-trade." Using the economic analysis discussed in class (including graphs) describe how regulation works, explain how cap-and-trade works, and discuss whether and how cap-and-trade policies improve (from an economic perspective) upon regulation.
Describe, in words (no graphs), the First Theorem of Welfare Economics.
Suppose that there is a negative externality in the market for trout in Colorado. Letting Q represent pounds of trout, explain (using graphs and words) why government intervention in the market for trout may be appropriate.
Suppose that all trout are found in one (big) lake and that someone purchases the lake. So, they own the lake. Might government intervention be appropriate in this case? Explain your answer.
Recent debate about reducing carbon emissions has focused on the relative benefits of (a) a carbon cap-and-trade (permit) system and (b) a carbon tax (i.e., a tax on emissions of carbon).
(A) Using what we have learned in class, explain the economic logic underlying (a) and that underlying (b).
(B) From an economic efficiency perspective, is either policy (a) or policy (b) preferred? Of course, explain your answer
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What will have to happen to price in order for equilibrium
: what will have to happen to price in order for equilibrium to be attained?
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Assignment on natural selection
: Describe the process of natural selection in your own words. You can answer this either as a paragraph or in a list format. Include all the necessary components and how these relate to each other, leading to change over time.
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What is the principal balance on the loan
: You take out a 25-year $230,000 mortgage loan with an APR of 9% and monthly payments. In 10 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan? (Round the monthly loan payment to 2 decimal places w..
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Relate the CAPM formula to the Security Market Line
: Relate the CAPM formula to the Security Market Line (SML) and explain what the SML shows. Explain how inflation affects the SML. Explain how changes in investor risk aversion (MRP) affects the SML
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Describe the first theorem of welfare economics
: Suppose that there is a negative externality in the market for trout in Colorado. Letting Q represent pounds of trout, explain (using graphs and words) why government intervention in the market for trout may be appropriate.
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The betas and weightings of individual securities
: Calculate portfolio beta (β) given the betas and weightings of individual securities. Calculate expected return, E(r), for a stock using the CAPM formula. Calculate portfolio expected return given the returns and weightings of individual securities
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What is the six month forward exchange rate
: The nominal yield on 6 month T- bills is 7% while default free Japanese bonds that mature in 6 months have a nominal rate of 5.5%. in the spot exchange market, 1 yen equals $0.009. if interest rate parity holds. what is the 6 month forward exchange r..
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What is the cross rate between the yen and the peso
: At today spot exchange rate 1 u.s dollars can be exchange for 9 mexican pesos or for 111.23 Japanese yen. you have pesos that you would like to exchange for yen. What is the cross rate between the yen and the peso: that is, how many yen would you rec..
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Huche company allows its employees to carry
: Huche Company allows its employees to carry over unused personal time off (PTO) days (vacation, sick days, etc.) from year to year. In addition, employees have the option to "cash out" their unused days at the end of the year.
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