Assume that we have a fixed supply of a depletable resource…

Assume that we have a fixed supply of a depletable resource to allocate between two periods. The demand function is the same in each of the two periods, the marginal willingness to pay is given by the formula P = 11 – 0.3q, and the marginal cost of supplying that resource is constant at $2 per unit. 30 units are to be allocated between two periods and the discount rate is 10% Which graph correctly depicts this efficient allocation? A. B. C. D.  

Suppose a proposed public policy could result in three possi…

Suppose a proposed public policy could result in three possible outcomes: (1) present value of net benefits of $4,000,000, (2) present value of net benefits of $1,000,000, or (3) present value of net benefits of –$10,000,000 (i.e., a loss). Suppose society is risk-neutral and the probabilities of occurrence of each of these three outcomes are, respectively, 0.85, 0.10, and 0.05. Should this policy be pursued or trashed?

In the Wall Street Journal article “Are the Amazon’s Trees W…

In the Wall Street Journal article “Are the Amazon’s Trees Worth More Alive than Dead? A New Industry Thinks So,” Samantha Pearson discusses bioeconomies in Brazil as a potential replacement for logging, mining, and cattle ranching. What is one criticism of bioeconomies addressed in the article?