The Hotelling rule of extracting non-renewable resources is expressed as; (P-C)-(P-C) P-C a) Interpret meaning of...
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The Hotelling rule of extracting non-renewable resources is expressed as; (P₁-C)-(P-C) P-C a) Interpret meaning of this expression b) Given a 2-Period planning mining model with; 8 (5 Marks) P₁ = P₂ = 700 MC(q)= 200 - 0.25q, MC(9₂) = 200 - 0.259₂ and a Stock constraint of; 9₁ +9₂ = 2500 Calculate the rent maximizing quantities at period 1 and 2 assuming a 10% interest rate (5 Marks) The Hotelling rule of extracting non-renewable resources is expressed as; (P₂ -C)-(P-C) P-C a) Interpret meaning of this expression b) Given a 2-Period planning mining model with; 8 P₁ = P₂ = 700 MC(q) = 200 - 0.25q, MC(q) = 200 -0.259₂ (5 Marks) and a Stock constraint of; 9₁ +9₂ = 2500 Calculate the rent maximizing quantities at period 1 and 2 assuming a 10% interest rate (5 Marks) The Hotelling rule of extracting non-renewable resources is expressed as; (P₁-C)-(P-C) P-C a) Interpret meaning of this expression b) Given a 2-Period planning mining model with; 8 (5 Marks) P₁ = P₂ = 700 MC(q)= 200 - 0.25q, MC(9₂) = 200 - 0.259₂ and a Stock constraint of; 9₁ +9₂ = 2500 Calculate the rent maximizing quantities at period 1 and 2 assuming a 10% interest rate (5 Marks) The Hotelling rule of extracting non-renewable resources is expressed as; (P₂ -C)-(P-C) P-C a) Interpret meaning of this expression b) Given a 2-Period planning mining model with; 8 P₁ = P₂ = 700 MC(q) = 200 - 0.25q, MC(q) = 200 -0.259₂ (5 Marks) and a Stock constraint of; 9₁ +9₂ = 2500 Calculate the rent maximizing quantities at period 1 and 2 assuming a 10% interest rate (5 Marks)
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