Imagine that the state legislature raises the tax on gasoline by 10 cents/gallon.

what most likely happens next?

a. service station operators grumble, but pay the tax without passing the cost along to you.

b. service station operators pass along as much of the tax to you as they can, probably about 6 cents/gallon.

c. none of these choices.

d. service station operators pass along the tax to you, adding the 10 cents to the price of a gallon of gas.

If his parents cannot alex with college, and two of his scholarships will be awarded to other students if he does not accept them immediately, which is the best option for him?

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms. a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.

Jamie is saving for a trip to europe. she has an existing savings account that earns 3 percent annual interest and has a current balance of $4,200. jamie doesn’t want to use her current savings for vacation, so she decides to borrow the $1,600 she needs for travel expenses. she will repay the loan in exactly one year. the annual interest rate is 6 percent. a. if jamie were to withdraw the $1,600 from her savings account to finance the trip, how much interest would she forgo? .b. if jamie borrows the $1,600 how much will she pay in interest? c. how much does the trip cost her if she borrows rather than dip into her savings?