1) U.S. policy to increase the miles per gallon (mpg) of new cars is to mandate an average mpg for cars sold by U.S. manufacturers. In many countries within the European Union, the policy is to tax gasoline so that the price per gallon at the pump is stable around $4.50 per gallon. Which policy is more to be successful at the least cost? Explain.
2) What role, if any, do property rights (efficient or inefficient) play in designing and implementing environmental policy? Explain.