Problem Set 2 (PS2)
Principles of Macroeconomics (Eco 200-800) Ranjit Dighe
Solutions will be posted or distributed by Fri., Feb. 18, 2000 SUNY-Oswego

A. The city of Oswego recently considered changing its water-fees policy from a flat-fee policy under which home owners pay a fixed yearly fee to a new system by which people would be charged for their actual usage of water (e.g., by the gallon) in their homes.
-- 1. Use economic analysis to explain how a typical person's water usage would be affected if the city adopted the new system.
-- 2. Use economic analysis to explain why your answer would be the same regardless of whether people end up paying more or paying less for their total water usage under the new system.

B. Case & Fair, 5th ed., Chapter 1: #2, 3

C. Chapter 1 Appendix: #2

D. Chapter 2: #1

E. Chapter 3: #8, 9, 10, 13

F. Chapter 4: #5, 7