We have covered several important economic topics:

• supply and demand
• price controls and their unintended consequences of price controls
• production taxes and subsidies
• elasticity
• consumer and producer surplus
• poverty and inequality
• market failures

It is time to use these to explain the topics below in a script explaining this to a friend who has basic econ knowledge (you don't need to explain supply and demand from scratch)

Greenhouse Gas Emissions: Carbon Taxes and Climate Change Use Google Drawing j to create standard supply and demand curves to illustrate and the negative externality that comes with using gasoline. What is the negative externality? Clearly explain why the free market fails using the graph. Explain how a gasoline tax could, in theory, correct for this market failure. Show in your graph the price consumers face, the price producers face, and the tax revenues raised. Read "yond the Numbers jV' to explain why demand for gas is relatively price inelastic. If the price elasticity of demand for gasoline is 0.05 and there is a 30% rise in gas prices (due to a tax), by what percent does quantity demanded fall? Show your work. Read this Federal Reserve ana|Y_S 3 to explain an estimate of what the price elasticity of demand for gas is based on recent research? (Optional - you can read about aggggation bias 3 here if you want). If the demand for gas is more price-elastic than previously thought, does that make a gasoline tax more or less effective at reducing consumption? Illustrate and explain your answer using a supply and demand graph using Google drawings. That is, you are comparing a tax with an inelastic demand to a tax with a more elastic demand. Enroads is a cutting edge climate model created at MIT and available for free to the public. Watch the 2 minute 26 second introduction video on the En-Roads home p_age f7). With no action taken, the best estimate scenario is global temperatures will increase 3.3 degrees Celsius by 2100 (relative to 2000). Many have argued for limiting this rise to 2 degrees - but getting there is a challenge. Play around and learning about the model for a bit and then create and briey comment on the three scenarios below. Scenario 1: You will nd that Carbon pricing (similar to the gas tax you have demonstrated above) is the most effective policy at limiting temperature rises. Put in a Carbon tax (and phase-in rate) of your choice and explain to the viewer the impact. You can either do this live in your video, or take a screen shot of the outcome. Why do you think Carbon pricing is the most effective strategy? Scenario 2: Economic growth in developing countries is critical to bring people out of poverty. Reset the values to the baseline (click on the circle arrow next to the home icon). What happens to the temperature rise if you bump up per capita GDP growth to 3% per year (in isolation)? Should we limit economic growth in poor countries to protect against climate change? What is the moral trade-off of doing that? Scenario 3: Reset the values to the baseline. I will give you a freebie the current scenario assumes global population will be 10.4 billion in 2100, but I have been reading new forecasts that suggest global population may peak at a bit over 9 billion people so let's put in 9 billion people in 2100. Now adjust the other variables and see if you can create a scenario that limits temperature rise to 2 C by 2100. Once you achieve this, show it in your video and explain how you got there. Thank um ll