Quoting Gervais Brooks-Hamster; "I do not understand it. Why should interest rates have any impact upon the demand for stocks?" What explanation would you give to Gervais? At a recent auction, Tarquin Fin-tim-lin-bin-whin-bim-lim-bus-stop-F'tang-F'tang-Ole-Biscuitbarrel bought the only two existing copies of the famous Freedonian Velvet Elvis' stamps. After the purchase, Tarquin Fin-tim-lin-bin- whin-bim-lim-bus-stop-F'tang-F'tang-Ole-Biscuitbarrel went to the front of the room and burned one of the stamps in front of the shocked audience. What must Tarquin Fin-tim-lin-bin-whin-bim-lim-bus-stop-F'tang-F'tang-Ole- Biscuitbarre believe in order for this to be a wealth maximizing action? Explain with a demand supply diagram. The town of Woodpile is located in the southwest region of Freedonia. Suppose that the demand for garbage removal for each household is given by P = 12 -0.6 q where q is the number of bags of garbage removed per month. In the past, the town has charged a flat fee of $30 per month for garbage removal. However, in an effort to reduce the amount of garbage, a local policy analyst, Anne Elke, has suggested charging the flat fee and a per bag fee. a. If the town wishes to reduce the amount of garbage disposed by 10 %, what per bag fee should it charge? b. A local politician, Danny Lust, wishes to reduce garbage disposal by 10 % as suggested in part a but he also does not want to upset the voters. Given the per bag fee from part a, he wants to adjust the flat fee so that the household has the same NET BENEFITS as it did before the per bag fee was introduced. What flat fee should be charged. (Hint: Here, NET BENEFITS = CS-Flat Fee.)