University of Michigan Ann Arbor Economics Question

Question 1 

According to the article about cap-and-trade by Robert Stavins, what types of transaction costs can occur in tradeable permit markets?

Question 1 options:

Searching and information-collection

Bargaining and deciding

Monitoring and enforcing

All of the above

Question 2 

Luckily, empirical evidence from cap-and-trade systems for leaded gasoline and sulfur dioxide (SO2) in the US show that transaction costs have been minimal.

Question 2 options:TrueFalse

Question 3 

In the second Grist.com article for this week, how did Georgia Power avoid paying abatement costs for coal ash?

Question 3 options:

Buying up land across the country for conservation and preservation.

Buying up land near coal-power plants so ground contamination would be on Georgia Power owned land and they wouldn’t have to pay for remediation. 

Buying up patches of coal so they would have more coal to use to power their plants.

None of the above. 

Question 4 

We know that abatement means scaling back or reducing. Abating coal ash pollution would be costly for Georgia Power because the coal ash would need to be held in a more protective way than unlined ponds, the water quality would need to be closely monitored, and contamination that leached beyond their property lines would need to be cleaned up. Which of the following constitutes a benefit from coal ash abatement (these would help us find MABs for coal ash abatement)?

Question 4 options:

Improved health for residents near by coal ash retention ponds. 

Increased house values for home near coal ash retention ponds.

Improved ecosystem quality due to less heavy metal contamination in the watershed.

All of these are true.

Question 5 

When a consumer buys a stock on an online trading platform like Robinhood, the moment they purchase a stock on the website they immediately own the stock(s) they purchased. 

Question 5 options:TrueFalse

Question 6 

According to the Planet Money podcast, which of the following is not part of why Robinhood had to halt some stock orders in January 2021?

Question 6 options:

Robinhood is a trading platform but does not actually execute stock trades. Rather it uses another company to perform the actually trading in the stock market. 

There is a lag between when orders are placed by Robinhood users and formally executed and closed. Robinhood has to post money each day to cover the amount of money their users owe for open trades to ensure orders will be paid for. 

Robinhood didn’t have enough money to post to the clearinghouse to cover the increased demand for trades through their platform because of the popularity of stocks like GameStop, Blackberry, and Motorola. 

Robinhood was retaliating against non-hedge fund traders.