INSTRUCTIONS: Answer the questions below as short answer Study Questions to help you focus on the central issues of the articles and to prepare for your Exam.

Recommendation: Allow yourself time to contemplate the issues.

1. What is the role of externalities in causing environmental pollution? Why is the government justified in regulating externalities? What techniques can the government use to reduce pollution?

2. According to Pres. Clinton’s Council of Economic Advisors, the fees that the federal government charges ranchers to graze animals on federal land "should reflect both the value of the forage used by an additional animal and the external environmental costs of grazing an additional animal (such as the value of reduction of in recreation or water quality)." Why?

3) How has income inequality and wealth inequality changed in the U.S. over the last 25 years? According to the articles in the reading packet, especially Slow Wage Growth and Widening Inequality, what three reasons account for rising income inequality?

Have a question? E-mail Phil:martinezp@lanecc.edu