ECON 431 Final: ECON 431 Cal Poly SLO 2004 Final Exam
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Please provide a short, but well thought out answer to each of the following question. You should spend more time thinking about the answer than writing the answer, and, where possible, you should provide a diagram to support your answer. In the midwestern u. s. , utilities produce electricity by burning coal, a process that produces greenhouse gas emissions (notably so2) as a by-product. Amendments regulate so2 emissions at these coal-fired electric plants. Regulators are uncertain what market so2 demand is among these polluting electric utilities. State whether you feel the elasticity of demand for so2 among electric utilities is elastic or inelastic and justify your answer. Draw a diagram that shows whether taxes or standards are likely to perform better as a policy to control so2 emissions. In an ideal socialist system, natural resources are owned by all the people rather than by individual, profit-maximizing firms. Socialist governments claim to work for the welfare of the people.
