UC Riverside What Is the Cap and Trade System and How Does It Work Questions

1. Watch the videos below and answer the following questions:

1. What is the Cap and Trade system for and how does it work?
2. How is Cap and Trade better than command and control at reducing emissions? Explain how is Cap and Trade better than taxing to reduce emissions? In order to do so, draw or explain how the welfare loss (or the MSC) is reduced with both options.

2. Watch the video on Icelandic fishing and answer the following questions:

1. Explain the public good identified in the video (what is a fishery)? Explain the TWO characteristics of this good that make it “public”.
2. Why are public goods not produced by the private market? Explain carefully.
3. Explain the externality that results from over-fishing? Who is impacted? How are they impacted from over-fishing?
4. How did they solve this problem? Use the information from the video to answer this question.
5. Why is this considered better than taxing/subsidizing (which is the solution discussed in your text)?

3. After viewing the videos and articles on poverty and inequality create, at minimum, a 2 page discussion that

(a) summarizes the content of all of the sources

(b) explains why Kennedy and Johnson launched a War on Poverty and why has there been little change to poverty rates since this time

(b) explains the microeconomic impacts of growing income inequality and the connection to poverty in the US.

**Use several economic Key terms from the lesson overview within your discussion.

4. Read the following articles and provide information from these sources and information from the trade learning resources to answer the following questions in 2 pages of written text:

1. Which nations are the largest trading partners of the US (describe the top 3 and what products are traded)?
2. Explain the reasons that these nations are the most prominent trading partners.
3. What is NAFTA and what are the positive and negative impacts of this trade agreement?

US Trade Agreement with the Americas-Mexico (Links to an external site.)

Pros and Cons of NAFTA (Links to an external site.)

The Census Provides Foreign Trade Stats (Links to an external site.)

The Impact of NAFTA (Links to an external site.)

LINKS:

https://ustr.gov/countries-regions/americas/mexico (Links to an external site.)

https://www.thebalance.com/nafta-pros-and-cons-3970481 (Links to an external site.)

https://www.census.gov/foreign-trade/statistics/highlights/top/top1312yr.html

https://www.cfr.org/backgrounder/naftas-economic-impact