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Econ 131 lecture 18

Econ 131 lecture 18 - Finals Week TA session(Problem set 6...

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Finals Week TA session (Problem set 6 and review) Monday, December 5th: 6:30 - 8:20pm Warren Lecture Hall 2005 Final exam next Thursday, December 8th 3:00pm-6:00pm, Center Hall 101 Office Hours TA office hours Monday 12/5 2-3pm (Ketki in Sequoyah Hall 237) and 5-6pm (Kirti in Econ 125) Tuesday 12/6 1-2pm (Jake in Sequoyah Hall 236) and 6-7pm (Kirti in Econ 125) Wednesday 12/7 10am-noon (Anthony in Econ 122) Professor Jacobsen’s office hours (in Econ 223) Monday 12/5 5-6 pm Tuesday 12/6 10-11am
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Today High oil prices and the environment (Example of the externalities model) Notes on population (not on the final) Summary and sample final exam questions Political Unrest Changes Oil Prices Libya once supplied about 1.8% of the world’s oil The recent civil war stopped oil supply and created a 15% price spike In spite of claims by Saudi Arabia that it compensated
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High Oil Prices and the Environment When oil prices rise, is there less of a need for environmental policy and taxes? Are Higher Oil Prices a Good Thing? Q oil P Q 1 A B C D S SMC P 1 Consumer surplus = A+B+C Producer surplus = 0 Environmental damage = B+C+D Total surplus = A - D Total surplus = A’ - D’ Consumer surplus = A Producer surplus = 0 Environmental damage = B Tax revenue = B Total surplus = A Q oil P Q 1 A’ B’ C’ D’ S SMC’ P 1 Q oil P Q 1 A B C D S SMC P 1 S’ Starting point Higher prices from increased resource cost Higher prices from environmental tax
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Gain from an Environmental Tax?
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