ECON 290

This document offers a comprehensive set of exam questions and answers on various topics in environmental economics. The questions are designed to test students' understanding of key concepts such as externalities, market-based instruments, and international environmental agreements. The answers provide clear and concise explanations that help students to deepen their knowledge and develop a better understanding of environmental economics. Overall, this document is an invaluable resource for an...

Problem Set 2 ECON 290, Models of Choice in Competitive Markets Jean Guillaume Forand∗ Fall 2016, Waterloo 1. Suppose that a firm has a the production function f(z1, z2) =    2z1 + z2 if z1 ≤ 2, 0 if z1 > 2. (a) Show that this production technology satisfies the no-free lunch property. Solution. Working with the production set, we need to show that (0, 0, q) ∈ Q only if q = 0. To see this, note that (0, 0, q) ∈ Q implies that q ≤ f(0, 0) = 0, so that because...