Question: 2. Exogenous technological progress (decreasing MEC): Using a 2 period model (assumptions: P=10-0.5Q, MEC=3/t, where t is the time period, r=10%, 20 units of the

2. Exogenous technological progress (decreasing MEC): Using a 2 period model (assumptions: P=10-0.5Q, MEC=3/t, where t is the time period, r=10%, 20 units of the resource available) answer the following questions: a. Discuss how technological progress is reflected in the resource extraction problem b. Why do we refer to this type of technological change as "exogenous"? c. Derive the optimal quantity allocation across time periods (Q1", Q2*) d. Derive the optimal resource prices that yield this efficient allocation (P1*, P2*) e. What is the Marginal User Cost in both time periods (MUC1 , MUC2*) f. Discuss the role of technological progress in the optimal allocation of resource extraction. You may compare the optimal allocation in this question with that of problem 1

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