Solutions to Global Warming

https://www.youtube.com/watch?v=6RsrRpjAGi8

The video begins by pointing out problems of trying to reduce the emission of CO2 to address the problem.

FYI: Levitt identifies 2 solutions, not 3.

Another Prominent Economists Argues Against Trade Restrictions

http://www.vanityfair.com/news/2017/02/donald-trump-china-economics-trade

What do you predict will happen to the price of gasoline?

https://twitter.com/WSJ/status/832596498336595969 states that the gasoline market has the largest glut in 27 years.

1. What is the impact of a glut in gasoline on the price of gasoline going forward?
2. What is the impact on the price of oil going forward? Remember that gasoline refiners buy substantial quantities of crude oil because crude oil is an input used to produce gasoline.

What can government do to ease the costs of free trade?

http://www.cer.org.uk/insights/crisis-capitalism-perhaps-dont-blame-it-globalisation

How can comparative advantage help you cut your to-do list in 1/2?

https://qz.com/907153/the-economic-theory-of-comparative-advantage-can-help-you-cut-your-to-do-list-in-half/

A Defense of Capitalism

http://www.americamagazine.org/politics-society/2017/02/06/confessions-catholic-convert-capitalism

A Conservative Answer to Climate Change

Commentary. A Conservative Answer to Climate Change
by: George P. Shultz and James A. Baker III
Feb 08, 2017
Click here to view the full article on WSJ.com

TOPICS: Environmental Regulation

SUMMARY: Enacting a carbon tax would free up private firms to find the most efficient ways to cut emissions.

CLASSROOM APPLICATION: Students can evaluate whether a carbon tax set at the appropriate level would be yield allocative efficiency. They can also evaluate whether a tax would minimize the cost of a given reduction in carbon emissions. Students can compare a carbon tax and a cap-and-trade mechanism.

QUESTIONS: 
1. (Advanced) Compare the economic efficiency of a carbon tax and cap and trade mechanism. In doing so, set the cap at the same level as the equilibrium level of emissions under a carbon tax.

2. (Introductory) What are the four pillars of the proposed solution?

3. (Advanced) "A levy on emissions would free companies to find the most efficient way to reduce their carbon footprint." However, would the firms with the lowest costs of reducing emissions be the ones that do so?

4. (Advanced) What is a "Pigouvian tax"? Are the authors proposing such a tax?

What happens when bad weather causes availability issues?

http://www.bbc.com/news/uk-38851097

"Tesco is limiting shoppers to three iceberg lettuces, as bad weather in Spain caused 'availability issues'.

"Morrisons has a limit of two icebergs to stop 'bulk buying', and is limiting broccoli to three heads per visit.

"Prices have also risen, with Lidl's iceberg lettuce up to £1.19 from 42p."

This is a textbook case of the types of things that happen when supply decreases. Here are two questions to ponder.

1. Would Tesco and Morrisons need to limit shoppers if they increased price even more?
2. Why do Tesco and Morrisons limit the increase in price and restrict how much shoppers can buy instead of raising price even more?

How is the economy in Romania doing?

http://www.reuters.com/article/us-romania-government-protests-idUSKBN15H0P9

"It joined the European Union in 2007, but it has struggled to combat endemic corruption and remains one of the bloc's poorest members."

Regulation, Pigouvian Tax, or Cap and Trade?

California is using both regulation eliminate reusable plastic bags and a tax to reduce paper and reusable non-plastic bags. Is this combination an efficient way to improve the environment?

Opinion. In California, 'Paper or Plastic?' Is Against the Law

by: Allysia Finley
Jan 28, 2017
Click here to view the full article on WSJ.com

TOPICS: Environmental Regulation

SUMMARY: Supermarkets can no longer give out shopping bags, though the claimed benefits are dubious.

CLASSROOM APPLICATION: Students can evaluate whether California's ban on reusable plastic bags and 10 cent per bag regulated price on paper bags and reusable bags passes a cost-benefit test. Instructors can introduce the concept of the Pigouvian tax and ask whether the marginal social cost of the paper and reusable bags equals 10 cents. Students can also critically evaluate the evidence about whether the regulated fee is inefficient presented in the opinion piece and ask whether evidence is missing from the argument.

QUESTIONS: 
1. (Introductory) Does the opinion piece offer convincing evidence that reusable grocery bags and paper bags are worse for the environment than plastic bags? Are all dimensions of environmental harm caused by plastic bags considered in the opinion piece?

2. (Advanced) "Turns out plastic bags make up a tiny share of litter, less than 1% in most cities, according to a 2013 survey by Environmental Resources Planning. A 2009 litter survey by Keep America Beautiful found that plastic bags make up less than 1% of objects caught in storm drainers." Does this evidence suggest that, considering only litter, plastic bags should not be banned? Does it imply that disposable containers other than plastic bags should be higher than plastic bags on the list of items to be taxed or banned?

3. (Advanced) The requirement that stores charge at least 10 cents for alternative bags was meant to keep retailers from undercutting each other by giving them out free. Does this statement imply that grocery stores are playing a game like a prisoner's dilemma when deciding whether to offer paper bags for free? Does it imply that grocery stores are better off with the 10 cents per bag price?

4. (Advanced) What is a "Pigouvian tax"? Is it efficient for a government to impose a Pigouvian tax on goods that create negative externalities?