## Environmental Economics

1. Suppose that in order to decrease pollution, the city in which you live is contemplating either (1) requiring everyone to ride a bike or walk to work, or (2) providing each family with 10 gallons of gas per week, which can be bought and sold among families. (4 points)

1.a.) Categorize each of these types of policies

1.b.) Explain which policy would be more efficient and why.

Chapter 7

2. Identify a strength and a weakness of each of the following fuels: (6 points)

2.a) Coal

2.b) Natural gas

2.c) Solar Fuel

3. If you had $10,000 to invest in an alternative fuel, which one would you pick? Explain your answer. (2points)

Chapter 8

4. Assume that there is a resource that can be consumed in 2 periods, now and the future. In the two-period scenario, suppose the marginal benefit curve for each period is given by the equation y = 100 – 2x. (5 points)

4.a. What is the optimal consumption level in each period if the total quantity is 100? Explain.

4.b. What is the dynamically efficient allocation in each period if the total quantity is 60 and the discount rate is zero?

4.c. Without doing any calculations, briefly explain what would happen to the dynamically efficient allocation if the total quantity is 60 and the discount rate is positive.

Chapter 9

5. Suppose that fruit flies on Mango Island live for 3 days. On their first day, they are considered young and reproduce with a TFR of 2. Half of their offspring are female and half male. On the second day, the flies are middle-aged and cannot reproduce. On the third day, they are considered old and they cannot reproduce. All fruit flies live to old age. Indicate the number of fruit flies on Mango Island on days 2, 3, and 4 under each of the following scenarios: (4 points)

5.a) On day 1, there are equal numbers of males and females in each age category, including six old flies, four middle-aged flies, and two young flies.

5.b) On day 1, there are two males and two females in each age category.

6. “Doubling time” is the number of years it would take a population to double in size at its current growth rate. The doubling time is found by dividing 69.3 by the growth rate (in %). Calculate the doubling time for the following countries: (4 points)

6.a.) Afghanistan: growth rate 3.5 percent

6.b.) Belgium: growth rate 0.2 percent

6.c.) Canada: growth rate 1.0 percent

6.d.) Bangladesh: growth rate 1.6 percent