Economics

 Each answer should consist of one or two paragraphs that contain analysis (not opinion).  

1. Consider a highway with a hot lane and a lane that has no toll.  Assuming that the toll must be paid by all cars that use the hot lane, no matter how many people are riding in them.  What can you predict about the average occupancy of vehicles in the hot lane compared to vehicles in the other lane during rush hour?

2. Explain how making something illegal (like sex, booze or drugs) impacts the quality, quantity and price of the illegal substance.  In addition, are there any unintended consequences of making drugs illegal that can cause harm to people?

3.  Anti-fracking “Baptists” include those concerned with any further environmental degradation from extracting non-renewable resources from the earth.  Identify the “bootleggers” who would support the Baptists, albeit not so publicly, but still forcefully.  Why would these bootleggers benefit from curtailed fracking?

4.  Explain how allowing payment to kidney donors could reduce the cost to transplant recipients and their insurance companies.  Are there any additional social benefits that could occur?  Explain.

5 If you lived in California this last summer, you would hear little about things other than water.  A drought in California then led to rationing water in many uses in most of the State.  What do you think led to the water crisis and how can it be fixed? (Be analytical in your answer.  There was a lot of rain this year, but that is not the analytical fix for the problem at hand.)