public interest theory of regulation

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Answer the questions

1. Please answer the following question (Kolstad, page 259 #3

“Consider the case of a rival bad. Would efficency require that a Pigouvian fee be levied on the prodiucer of the bad and the reeipts given to the consumers as compensation? Does it matter if

the bad is excludable or nonexcludable?”

2. Please answer the following question (Kolstad, page 238 #1)

“Please explain (and discuss) how the public interest theory of regulation might come to a different conclusion regarding emissions fees v. marketable permits that the interest group theory.”

Kolstad, Charles D. 2011. Environmental Economics. Second Edition. New York, NY: Oxford University Press.

Please find this book and read the article then answer the questions.

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