1- 6 are True / False Explain why?

1. Housing subsidies and rent control have the same efficiency implications since both have the same policy goal (to help low-income individuals access affordable housing).

2. Assuming the free-market quantity is efficient, imposing a tax in an agricultural commodity market (e.g., wheat) would not have any deadweight loss in the short run.

3. Taxing carbon emissions can be thought of as a policy that increases equity and efficiency.

4. Taxes have better welfare implications than emissions quotas when dealing with environmental externalities.

5. Obamacare - subsidized health insurance - is an example of a situation in which both efficiency and equity can increase simultaneously through a government intervention.

6. The Coase theorem states that individuals can always find a solution to externality dilemmas if property rights are enforced.

7-9 are open ended

7. The rate of car theft has gone down a lot over the past few decades. But when theft rates were high, there were several popular anti-theft devices. The Club (a visible steering wheel lock) made it more difficult for a thief to steal a car. LoJack (an invisible tracking system) made it easier for the police to catch a thief who has stolen a car. Discuss any positive or negative externalities associated with these goods.

8. Provide two examples of markets with negative environmental externalities. In each case, be specific about the market, whether the externality relates to consumers or producers, and which bystanders are affected and how.

9. Provide an example of a government policy that decreases economic efficiency - in words and graphically. And explain why the government would pursue policies that decrease economic efficiency.