-What is your opportunity cost for taking this class?
-If the government were to increase taxes on gasoline, what will happen to the total government revenue? Why? -What are you assuming about the elasticity of the demand curve of gasoline? What is the formula for elasticity? Would the government make more tax revenues taxing airline tickets instead? Why or why not? What assumptions are you making about the elasticity of airline tickets? Make sure to graph the demand curve for both gasoline and airlines.
-List and give an example of each of the four types of market failure (i.e. the reasons that we need government intervention.)