The demand function for a product using resource X is given by MB 80 0 4Q , which is constant over time and the cost of production is constant at MC 20 Find the static equilibrium for this product in a single time period (call this t0) (2 marks) Write the function for Marginal Net Benefit (MNB) (2 marks) Suppose that there is a limited stock amount of 250 units can be consumed in two time periods t0 and t1 Assume that the current generation (those consuming in t0) pays no regard at all to the consumption in t1 How much is left to consume in t1 (2 marks) Suppose the discount rate is 10 What is the dynamically efficient consumption production in t0 What is the dynamically efficient consumption production in t1 (4 marks) How does discount rate affect the allocation of resources across different generations (2 marks)

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Question: The demand function for a product using resource X is given by MB = 80-0.4Q , which is constant over time and the cost of

The demand function for a product using resource X is given byMB = 80-0.4Q, which is constant over time and the cost of production is constant atMC = 20.

Find the static equilibrium for this product in a single time period (call this t0). (2 marks)
Write the function for Marginal Net Benefit (MNB). (2 marks)
Suppose that there is a limited stock amount of 250 units can be consumed in two time periods t0 and t1. Assume that the current generation (those consuming in t0) pays no regard at all to the consumption in t1. How much is left to consume in t1? (2 marks)
Suppose the discount rate is 10%. What is the dynamically efficient consumption/production in t0? What is the dynamically efficient consumption/production in t1? (4 marks)
How does discount rate affect the allocation of resources across different generations? (2 marks)

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