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| environmental economics HELP?!? Suppose an exhaustible resource is to be allocated across three periods. Demand for the resource is increasing over time, marginal extraction costs are constant at $20, and a total of 2600 tons of the resource exist: Demand in period 1: P1 = 100 - 0.1*Q1 Demand in period 2: P2 = 200 - 0.1*Q2 Demand in period 3: P3 = 300 - 0.1*Q3 Marginal extraction costs: MEC =20 Total stock available: 2600 tons In addition, the periods are one generation apart, with an interest rate between them of 100%. Find the efficient allocation of the resource across the three periods. What will the price, quantity, marginal extraction cost and royalty be in each period? Be sure to show all your work. Now suppose that a backstop resource is available at a marginal cost of $140. Calculate how the backstop would change the efficient use of the resource. Be sure to show what happens to prices, extraction costs, royalties and production in each period. How much of the backstop resource ends up being produced in total? You should assume that everyone knows about the backstop at the beginning of period 1. |
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| Thread | Thread Starter | Forum | Replies | Last Post |
| Do we live in age of environmental economics? | Pamela_88 | Economics | 0 | 04-17-2008 10:20 AM |
| Is there any Department of Environmental Science/Environmental Engineering | Frank, the True Believer | Engineering | 1 | 04-15-2008 11:55 AM |
| environmental engineering? what is it? | AyJay Muffincakes | Engineering | 0 | 04-09-2008 06:43 PM |
| According to a study concerning environmental economics? | sanko | Economics | 2 | 03-06-2008 10:08 AM |
| Careers in Environmental Economics? | jo. | Economics | 0 | 03-04-2008 06:17 PM |