Define and discuss free goods and how the relate to the allocation problem.
Macro and Micro economics
Question 1: Siebert suggests that air and water are prototypes of free goods. Please define and discuss free goods and how the relate to the allocation problem.
Question 2: In the appendices to Chapter 2, Siebert asserts that input-output models can be extended to become applied general equilibrium models. Please define and describe equilibrium and discuss what's necessary for general equilibrium.
Question 3: "What groups would be hurt most by the transition to a green economy? What groups would most benefit from the transition? Can you think of scenarios in which those who gain couldcompensate those who would be hurt?"
Question 4: "Does the fact that CO2 produced in one nation results in adverse effects on other nations have any bearing on the likelihood that CO2 emissions will be reduced to the optimal level. Would the problem be easier to solve if all the costs and benefits were concentrated within a single country. Within a single elevator or office?" By the way, it's from Miller, Benjamin and North, The Economics of Public Issues