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1. Chapter 9: We have discussed 5 different types of economic value in class. Please give a personal example of each type of value based on your life experiences with COVID 19. Indicate which of these types of value are reflect well in markets or market-like exchanges and suggest a specific estimation method by which each type of value could be revealed?
2. Chapter 10/11: Compare and contrast static and dynamic efficiency applied to the fossil fuel market. Compare and contrast the concepts of resource rent and user cost as applied to this market and the potential differences in optimal resource use under static and dynamic efficiency.
3. Suppose gas costs $3 a gallon and the average car gets 28 miles per gallon. If Congress mandates that cars have to get 36 miles per gallon, by what percentage will this lower the costs of driving? If the elasticity of total miles driven (per year) with respect to the cost of driving is 1, by how much will total miles driven per year increase, assuming it is 10,000 miles at the beginning? How much will total annual gas consumption of the average car change as a result of the mandated program?
4. Chapter 12: We know that DV = (V₀ C) r + Sr describes the decision to cut wood now versus next year. If, V₀ = 1000; V₁ = 1250; C = 500; r = 0.10; and S = 750,

a) Should we extract this year or wait until next year (please show your calculations)?

b) What if V1 were 1000 and all the rest of the variables remained the same as the original case?

c) What if r were 0.05? 0.20?

d) What if C were 750?

e) Interpret the impact of changes in the values of each of the variables (V₀, V₁, C, r, and S) on whether we will cut the trees today versus some later time period.

5. Discuss and graphically illustrate. By decreasing effort, fishers can often catch more fish. Explain how this might sometimes be true.
6. Discuss and graphically illustrate. Why is there a difference between the maximum sustained yield and the economically efficient sustained yield?
7. A piece of land has a market value of $4,000 (per acre) if used for agricultural purposes. A land speculator buys some of the land, paying $6,000 per acre. Five years later she sells it to a house builder for $14,000 an acre. The builder builds a house (on an acre) for $100,000 and then sells it (and the land on which it sits) to a homeowner two years later for $136,000. Assuming that the land market and housing markets are both competitive and that there is no inflation during all of this, what is the total land rent in houses, and how was that rent distributed among farmer, speculator, builder, and homeowner?
8. Show that if the marginal costs of water supply are downward-sloping, then pricing so that marginal cost equals marginal willingness to pay means that the water company will experience losses. How might these losses be made up?
9. What are some potential third-party effects in the large-scale transferring of water rights from agricultural to urban areas?

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