ECON 290
American University Of Health Sciences
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Exam (elaborations)
Exam (elaborations) 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...
Exam (elaborations)
Sol-Ps2-290-2016 Econ 290
PopularProblem 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...