Problem set #1 is due by 5PM on Friday, September 30th in my office (Hillcrest 214.)

1.  Goodstein, Application 3.1

2.  Goodstein, Application 3.2

3.  This article describe a 1980s phenomenon: the purchasing and decimation by large corporations of forests in the Pacific Northwest:

To a raider, any tree standing is an unclaimed financial asset that could be cut and sold to maximize profits. Some timber companies have been taken over, and the new owners have accelerated harvests. In California, a backlash against the phenomenon got an initiative on the November ballot calling for a $710 million bond issue to buy and protect old forests.

What was the economic logic behind the actions of these corporations?  What actions, if any, should the government have taken in the face of these actions?  Justify your answers.

4.  Goodstein, Application 4.2

5.  Goodstein, Application 4.3

6.  Answer one of these two questions:

A.  Should regulation of mercury emissions in the USA be guided by the efficiency standard?  Why or why not?  Justify your answer with a modicum of online research.

B.  Under what conditions is an ITQ policy likely to succeed?  Under what conditions is it likely to fail?  Illustrate and justify your answers based on online research of at least two current ITQ systems that we did not read about for the class.

7.  In the introduction of Deep Economy, Bill McKibben writes:

Markets, obviously, work.  Building a local economy will mean, however, ceasing to worship markets as infallible and consciously setting limits on their scope.  We will need to downplay efficiency and pay attention to other goals.

Do you agree with Bill?  Why or why not?  Justify your answers.