FREC 444 Economics of Environmental Management
Micro Theory Review

1. Hops and Tongs are complements. Hops and Flumps are substitutes. Show the effects of an increase in the supply of Hops in each market. (P_H = price of Hops; P_T = price of Tongs.)
   
   
   
   
2. Hops are normal goods, Tongs are luxury goods and Flumps are inferior goods. Show the effects of an increase in income in each market.
   
   
   
   
3. Characterize each of the following goods (inferior, normal or luxury):
   • soybeans
   • dog food
   • children
   • education
   • health care
   • TV viewing

4. The US government subsidizes student loans. How does this affect --
   • demand for education
   • tuition rates
   • wages
   • LR income distributions

5. The US maintains strict quotas on sugar imports in order to protect US sugar beet producers. What are the effects of this policy on --
   • consumers
   • the dental health of US citizens
   • the market for artificial sweeteners
   • US cotton markets
   • US corn markets
   • street prices for cocaine
   • crime rates