Determine the optimal dynamic allocation of a nonrenewable resource across two time periods based on the...

Determine the optimal dynamic allocation of a nonrenewable resource across two time periods based on the information provided.

Your answer should include:

MNB₁
MNB₂
PV(MNB₂)
The optimal quantity of consumption in period one
The optimal quantity of consumption in period two, and
a detailed presentation of HOW you derived your answers.

Period One Period Two

Demand schedules: P_D1 = 100 - 0.4Q₁ P_D2 = 160 - 0.5Q₂

Supply schedules: P_S1 = 20 + 0.2Q₁ P_S2 = 60 + 0.3Q₂

Supply constraint: Q₁ + Q₂ = 200

Discount rate: 0.0595

Period one is now. Period two is twelve years in the future.

Expert Solution

Rahul Sunny answered 2 years ago

Suppose a nonrenewable resource can be extracted over two periods. Both periods are characterized by MB...

Suppose a nonrenewable resource can be extracted over two periods. Both periods are characterized by MB = 250 - .25Q and MC = 50 + .25Q and there are 350 units total available for extraction. Assume the discount rate is .15 (or 15%). Identify the socially optimal rates of extraction for period 1 and period 2. Identify and define the user cost associated with the extraction of this resource. Identify the socially optimal price of the resource for period 1...

Test whether profit for Massive Dynamic increased across the two time periods. You are not told...

Test whether profit for Massive Dynamic increased across the two time periods. You are not told anything about the population variances. Highlight the numbers that help you test the null hypothesis. In the text box below, explain whether once company has outperformed the other based on the evidence you provided in the last four spreadsheets. You need to reference the numbers you highlighted in your analysis. If you are concise, this should only take a few sentences. Note that I...

In economics, the intertemporal allocation of a scarce, depletable resource across generations is efficient, but not...

In economics, the intertemporal allocation of a scarce, depletable resource across generations is efficient, but not necessarily fair . give some example and explain.

What is the optimal allocation of the budget? How do you determine what’s optimal? Why is...

What is the optimal allocation of the budget? How do you determine what’s optimal? Why is the profitability index particularly helpful?

In stratified sampling, there are two methods of sample size allocation to the strata: optimal allocation...

In stratified sampling, there are two methods of sample size allocation to the strata: optimal allocation and proportional-to-size allocation. Suppose interest lies in estimating the mean of the population using ŭstrat(y). Let Vopt show the variance of ŭstrat(y) under optional allocation and Vprop show the variance of ŭstrat(y) under proportional-to-size allocation. (a) [4 marks] Show, with detailed steps, that Vopt <= Vprop. (b) [2 marks] under what conditions Vopt = Vprop? provide a proof for your answer.

1. Define the concept of optimal resource allocation. a. How does mainstream economic theory define the...

1. Define the concept of optimal resource allocation. a. How does mainstream economic theory define the optimal allocation of resources in a society? b. Why would ecological economists argue that the mainline economic view of optimal resource allocation is not optimal but leads instead to societies making suboptimal decisions about how to allocate their resources. suggests that markets fail and policy must therefore correct the failures of the market.

Q2) QUESTION 2 HAS TWO PARTS a) For a typical nonrenewable resource, would you expect the...

Q2) QUESTION 2 HAS TWO PARTS a) For a typical nonrenewable resource, would you expect the rate of extraction to increase, be constant, or decrease over time? Why? Explain with graph. b) Following the reasoning of Harold Hotelling, we might expect the real price of nonrenewable resources to increase continually over time, as resource stocks are depleted. But, empirical evidence (as documented by Margaret Slade) for a number of nonrenewable (mineral) resources indicates that their prices over the past century...

An OBST (optimal BST) minimizes the average search time across all keys in the BST. Given...

An OBST (optimal BST) minimizes the average search time across all keys in the BST. Given 5 ordered keys. k1<k2<k3<k4<k5, with probabilities of occurrence (0.25, 0.15, 0.10, 0.20, 0.30), respectively Use a Greedy algorithm that attempts to construct a BST that is an OBST. What is the complexity of your Greedy algorithm? Is your Greedy BST an OBST? Explain apply the DP algorithm to acquire an OBST show your work, including tables and the extraction of the actual OBST analyze...

Consider a firm that exists in a world with two periods (time 0 and time 1)...

Consider a firm that exists in a world with two periods (time 0 and time 1) and two equally likely states of the world at time 1. At time 0 the firm’s securities are traded. At time 1 the state is revealed. In the up-state the firm’s assets are worth $120 and in the down-state they are worth $40. The firm has debt outstanding with a face value of $60. Assume that the required rate of return is zero and...

The following two questions can be solved by dynamic programming. For each question, please describe optimal...

The following two questions can be solved by dynamic programming. For each question, please describe optimal substructure and express recurrence relation. Give pseudo-code and analyze time and space complexity of your algorithm. 1. Longest palindrome subsequence A palindrome is a nonempty string over some alphabet that reads the same forward and backward. Examples of palindromes are all strings of length 1, “civic”, “racecar”, and “aibohphobia” (fear of palindromes). Design a dynamic programming algorithm to find the longest palindrome that is...

Question