eco6..

Consider a very simple "two node" model in which natural gas is produced in region A and is transported by pipeline to region B. The price of natural gas in Region B is $6 per thousand cubic feet (Mcf) and the price of transportation service from Region A to Region B is $1/Mcf. a. If the market for producing gas in region A is perfectly competitive and there is a perfectly elastic supply of transportation service what will be the equilibrium price of natural gas in Region A? b. What will happen if the government places a cap of $4/Mcf on price that producers in Region A can charge for the natural gas they produce? Discuss how your assumptions about the shape of the competitive supply curve in Region A affects your answer. 2. Now consider a more complex natural gas supply and demand system such as the one we have in North America. There are multiple gas production areas and many consuming areas that are remote from production areas and rely on pipelines to transport gas to them. a. Assume that the price of natural gas at Henry Hub (Louisiana --- a gas producing area) is $5/Mcf and assume that the price of natural gas in Los Angeles (a gas consuming area) is $4/Mcf. Explain how such a price pattern can emerge? b. What incentives are there to expand pipeline capacity from producing areas in the Western U.S. to consuming areas in the Eastern U.S. 3. The United States maintains a Strategic Petroleum Reserve (SPR) that now contains 700 million barrels of crude oil. a. What factors would you take into account to design a policy to determine when and how much oil is released from the SPR? b. How would the expected supply behavior of OPEC affect your policy design?

An electric power system has the following mix of generating capacity installed on its network which is owned by several competing generating firms: Type Marginal Operating Cost Capacity Nuclear $15/Mwh 1000 Mw Coal $25/Mwh 2500 Mw Gas $60/Mwh 1500 Mw Turbine $80/Mwh 500 Mw a. Draw the competitive supply curve for the production of electric energy on this system b. Assume that demand is 3000 Mw and is completely price inelastic in the very short run. What would be the spot price in a perfectly competitive wholesale electricity market? c. Assume that demand is 4000 Mw and is completely price inelastic in the very short run. What would be the spot price in a perfectly competitive wholesale electricity market? d. Assume that demand is 6000 Mw at a price of $80, but that 600 Mw of this demand would be willing to be curtailed for a price of $4000/Mwh or more. What is the perfectly competitive market price in this case? 2. Describe how you would use the information above regarding the attributes of the generating capacity on this system, along with information about actual market prices and supplier behavior to measure whether or not market prices suggest that generators are exercising market power. 3. In New England, spot electricity prices in Maine are often much higher than are spot electricity prices in Boston even though they are part of the same regional network. How can you explain these price differences assume that the market is perfectly competitive

Numerical scores rarely tell the whole story. Besides how many words Mark can read correct per minute, what information do you need to know regarding his reading performance on th. Numerical scores rarely tell the whole story. Besides how many words Mark can read correct per minute, what information do you need to know regarding his reading performance on these assessments in order to plan effective fluency instruction/remediation? Please note: The focus of this question is on data not available when just looking at a words read correctly per minute score; data that would be necessary to plan effective an appropriate remediation. Therefore, constraints such as Mark's ELL status, time of day the assessment was administered, the setting for the assessment, who administered the assessment, his eye sight, his familiarity with the testing materials, his motivation level, or other similar factors should NOT be included in your response.ese assessments in order to plan effective fluency instruction/remediation?

: Sensitivitiy analysis>

(HBS case) From the original analysis, the expected return of TIPS was 4% for the next 10 years. But there are some forecasting errors, the future may not be what we forecast. Suppose there are some errors in the expected return of TIPS when we forecast. We forecasted the expected return of TIPS was 4%, but actually expected return should be 3.7% because of errors we forecasted in the wrong way. Suppose there is a forecasting error in the expected return on TIPS and the actual one should be 3.7% instead of 4%. What will happen? Will we have the same conclusion on it? Will we include inflation index bonds in the policy portfolio or not? [7:51 PM, 10/24/2021] Flo: A negative shock to consumer preferences is like a shock to demand. It leads to a fall in output and inflation. Why? As consumer demand falls some firms cannot adjust their price (sticky prices come from the Calvo pricing mechanism). Some firms cut price and some firms cut output. As a result both prices and output fall. If prices were not sticky there would be a fast adjustment of prices by all firms and output would remain unchanged. This was shown in part (a) where the natural rate of output was unaffected by the demand shock. This accords with common views of recessions - a collapse in demand that leads to a fall in output and inflation.

The A terms also make sense. A higher x-more flexible prices-raises the effect on inflation and lowers the effect on ... [7:52 PM, 10/24/2021] Flo: Optimal policy under discretion means the policy maker resets policy choices each period. We are told to assume an efficient steady state, so y appears in the loss function. The policymaker therefore solves a static problem:

min (+9) 9. 2

subject to the Phillips Curve. If we denote the Lagrange multiplier on the constraint as E, the first order conditions for inflation and the output gap are:

+=0

Combining these equations leads to a targeting rule that keeps the output gap pro portional to inflation:

There are no trade-off shocks in the Phillips Curve so it is possible to close the output. gap and the inflation gap at the same time. O is a solution to this policy rule, it minimize the loss function and is consistent with the IS and PC equations. Optimal policy therefore completely offset the recession in part (c).

e) Now suppose the central bank has access to a credible commitment technology. How would your answer to (d) change if the central bank followed the optimal policy rule under commitment? You do not need to derive anything, but explain how commitment policy differs from discretionary policy and whether this would change the optimal path tout ran and inflation.

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Consider a very simple "two node" model in which natural gas is produced in region A and is transported by pipeline to region B. The price of natural gas in Region B is $6 per thousand cubic feet (Mcf) and the price of transportation service from Region A to Region B is $1/Mcf. a. If the market for producing gas in region A is perfectly competitive and there is a perfectly elastic supply of transportation service what will be the equilibrium price of natural gas in Region A? b. What will happen if the government places a cap of $4/Mcf on price that producers in Region A can charge for the natural gas they produce? Discuss how your assumptions about the shape of the competitive supply curve in Region A affects your answer. 2. Now consider a more complex natural gas supply and demand system such as the one we have in North America. There are multiple gas production areas and many consuming areas that are remote from production areas and rely on pipelines to transport gas to them. a. Assume that the price of natural gas at Henry Hub (Louisiana --- a gas producing area) is $5/Mcf and assume that the price of natural gas in Los Angeles (a gas consuming area) is $4/Mcf. Explain how such a price pattern can emerge? b. What incentives are there to expand pipeline capacity from producing areas in the Western U.S. to consuming areas in the Eastern U.S. 3. The United States maintains a Strategic Petroleum Reserve (SPR) that now contains 700 million barrels of crude oil. a. What factors would you take into account to design a policy to determine when and how much oil is released from the SPR? b. How would the expected supply behavior of OPEC affect your policy design?