Business, 07.11.2019 06:31 hippocampus

Resource extraction tax: using a 2 period model (assumptions: p=10-0.5q, mec=3, r=10%, 20 units of the resource available) in the presence of a resource extraction tax of $1 per unit extracted, answer the following questions: a. derive the optimal quantity allocation across time periods (q1, q2) b. derive the optimal resource prices that yield this efficient allocation (pi, p2) c. what is the marginal user cost in both time periods (muc", muc2") d. compare your answers in a-c with those in 1.c-e. what is the effect of this tax on the optimal allocation and the price time path? e. what is the total net benefit with and without the tax to the resource owner? f. what is the total net benefit with and without the tax to society (i. e. consumer, resource owner and government)?

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Resource extraction tax: using a 2 period model (assumptions: p=10-0.5q, mec=3, r=10%, 20 units of...

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