326 Final Exam Review Exam With 100% Correct Answers..

real riskless interest rates {Ans: T = A}3 Types of Rent {Ans: Ricardian - productivity Von Thürnen - location, closer to market, the higher the rent Hotelling - scarcity applicable to exhaustible resources}Hayek/ Rational Expectations {Ans: - free up markets including capital markets - recessions being and end at the microeconomic level}Value in Use {Ans: but little in value in exchange ex. water, clean air, recreation}Value in Exchange {Ans: but little in the value of use ex. money, diamonds, stocks, bonds}IRR (Internal Rate of Return) {Ans: i such that NPV = $0}Command and Control Approach {Ans: -pass the law and people will comply -lacking info on control (abatement) costs, regulatory agencies simply assigns each source an equal amount of pollution reduction-- not cost effective -Pros: simplicity, appealing politically -Cons: fines come after the pollution , never enough police to catch the violators, always involves litigation where lawyers are the winners and not the environment}Revealed Preference of Valuation Methods {Ans: observed behavior trait that "reveals" underlying value}Monetarists {Ans: -less belief in government intervention to fix disequilibria, more freeing markings - fear of effects of inflation -more emphasis on central banks & less