What are some of the factors that could make social user costs different from private user costs
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Question:
What are some of the factors that could make social user costs different from private user costs in the case of mineral extraction?
a. Graphically and mathematically illustrate how, in a two period model of a nonrenewable resource, economic efficiency in the presence of a positive rate of discount implies increased consumption today and higher prices and lower consumption tomorrow than would be observed with a discount rate of zero.
b. Graphically and mathematically illustrate how user cost is affected by the expectation that future demand for a resource will shift outward on today’s efficient rate of extraction
Related Book For
Global Business Today
ISBN: 978-1259686696
10th edition
Authors: Charles W. L. Hill Dr, G. Tomas M. Hult
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