1). Explain, using precise economic terminology, the economic rationale for laws against insider trading.

2). Is "fairness" the economic basis for government laws and regulations designed to remedy market failures? If so why? if not, what is the economic basis?

3). A well-known conglomerate that manufactures a multitude of noncompeting consumer products instituted a corporatewide initiative to encourage the managers of its many divisions to share consumer demographic information. However, since the initiative was implemented, the Chief Executive Officer has noticed that less information is available than ever. Why do you think the CEO's plan was backfired?

4 - 5). In the 1990s the Mobil Oil Corporation acquired the rights to increase pollution by 900 pounds of sulfur dioxide per day at its Torrance, California, refinery. These rights were purchased from South Gate, California, at a price of $3 million after the latter acquired them from General Motors. As a result of this change, Mobil increased its output of noxious vapors in Torrance, California, by 900 pounds per day. Do you think the environment was harmed as a result of the sale of these pollution rights? Explain.