Question: answer both quetsions simplified and short EXTRA CREDIT QUESTION 2. (5 bonus points) Return to the problem of the mining firm in Question 9. Assume

answer both quetsions simplified and short

answer both quetsions simplified and short EXTRA
EXTRA CREDIT QUESTION 2. (5 bonus points) Return to the problem of the mining firm in Question 9. Assume once again that X = 25. Now assume also that the government has identified a marginal external cost (MEC) attributable to the mine's production. The marginal external cost is constant in each period at MEC, = 10 per unit produced. EC2.a. What are the socially-efficient per-unit tax rates the government could apply in period 0 and period 1 (label these Tg and T,, respectively) to the mining firm to induce it to produce only the socially-efficient amount of output? EC2.b. When the socially-efficient tax rates you calculated above are applied to the mining firm, what is the optimal extraction plan for the mining firm in period 0 and period 1

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