Natural
Resources Homework #1
Instructions:
Homework assignments are
optional – there is no penalty for not completing an assignment.
If you like, you can work
with other students in the class. Just turn in one assignment per group and
include all names.
Each student can earn up to
1 point per homework. The point will be added to the first exam score.
E-mail your work to the
class TA: Shan Zhou (shan.zhou@colorado.edu).
Or you can turn in the work
at the beginning of class.
The deadline to submit your
work is at the beginning of class on Monday, Sept. 21st.
If you have any questions
please ask at the beginning of class.
1) For a renewable resource find the efficient
output level. Use the following information:
·
MC = 4
·
P = 8 - 0.5 q
2) For a depletable resource find the efficient
output level and related price for time period 1 and time period 2. Use the
following information:
·
Two time periods.
·
MC = 2
·
P = 8 - 0.5 q
·
Total resource available = 16
·
r = 0.15
Answers
Consumption Time Period 1 =
Consumption Time Period 2 =
Price Time Period 1 =
Price Time Period 2 =
3) Following question #2, if
the discount rate ( r ) increases to a higher value
what happens to the distribution of consumption between the two time periods?