Assume that the oil extraction company needs to extract 0 units of oil (a depletable resource) reserve in a dynamically efficient manne

r What should be a minimum amount of Q so that the oil reserve extraction can last for at least 14 periods if (a) the marginal willingness to pay for oil in each period is given by P = 35 — 0.4q. (b) marginal cost of extraction is constant at $3 per unit and (c) discount rate is 1 %9  

QUESTION 3  

 

Assume that the a extraction company needs to extract Q units of oil (a depletable resource) reserve between two periods in a dynamically efficient manner What should be a maximum amount of Q so that the entire oil reserve is extracted only during the 1st period if (a) the marginal willingness to pay for oil in each period is given by P = 20 – 0.2q, (b) marginal cost of extraction is constant at 52 per unit. and (c) discount rate is 2%9  

QUESTION 4  

 

Assume that a country is endowed with 5 units of oil reserve. There is no oil substitute available. How long the oil reserve will last if (a) the marginal wlingness to pay for oil in each period is given by P = 7 0 42q. (b) the marginal cost of extraction of oil is constant at 52 per unit, and (c) discount rate is otoT  

a Sate and Submit to sal e cr •-t. •