1. Write two examples of incentives that might be introduced to influence companies such as car makers and gasoline producers to address the air pollution problems associated with cars.

2. Write one example of negative and positive externality. Explain how would you reduce or eliminate the negative externality.

3.Write one example of a factor that could change the demand for an environmentally unfriendly product and explain the environmental implications.

4. Explain why total elimination of environmental pollution (say air pollution or water pollution) would be ideal, but economically not optimal. Use a MD and MAC graphs and hypothetical numbers.

5. Explain why discounting must be used in multi-year environmental programs or projects.