Ed Hits Midterm ExamSTUDY QUESTIONS Monday. October to in class. The ex for the second half of the Class This is the style and format of the exam on am will take 90 minutes and there will be a lecture Please answer the questions completeiy and with diagrams if applicable You have 90 minutes for this exam. It is CLOSED BOOK and you are not to consult with notes. online information tarot cards or each other. You may use a calculator if required but it should not be necessary. (Points) 1} What is Hotelling's keen insught with respect to the producer's decision to produce crude oil now versus a later date? (What is the prot maximizing condition that follOWs this insight?) Describe the conditions he assumes for the production decision. 2) In our study of Crude Oil Imports and National Security, the authors make an almost forgotten argument that implementing restrictions on crude oil imports will increase U. 5. GDP. How will this happen? What will be the ultimate outcome? How much? (You may have to make a few assumptions about a starting point for price and quantities.) 3) How much has the U. S, subsidized foreign oil production since 911? What is the costbenet analysis of this subsidy? Do you agree with the U. S. stance and policy on this "subsidy?" 4) How would Pindyck suggest you quantify the costs of cleaning up decommissioned nuclear reactors? What are the costs that must be undertaken to renderthe sites safe and secure? 5) What are two main criticisms of Cap 8. Trade schemes to reduce emissions? Explain please. 6) Aubrey McClendon and Governor M, Jodi Rell were both wrong. Why? 7) if the price elasticity of demand is -0.11. what would be the change in price if quantity supplied increases by 2 million bbls per day in a world market of 90 million bbls per day? 8) What is a \"cross market Scheme" in energy trading? Explain and give an example. 9) What are the advantages and disadvantages of nuclear power plants for the US? 10) What is the free rider problem that Nordhaus describes with respect to climate agreements? Would the US be considered a free rider because the US isthe ONLY nation not to join the Paris agreements? Why