Using the two period model below for which Marginal Extraction Cost (MEC) of gold extraction is 2, inverse demand curve is = 8 0.4, and discount rate is = 0.1. Please fill in the following blanks using the figure below and information provided. (a) [1 pts] What is the quantity of the resource constraint (i.e., how much resource is available over these two periods)? __________________________________________________ (b) [1 pts] What area maximizes the total net present value of Period 1 and 2 (using labels from the figure)? _______________________ (c) [2 pts] If the Marginal User Cost (MUC) in period 1 is $1.92, what is the price in period 2 of the gold?______________________________________ (d) [2 pts] What is the present value of net benefit in Period 1 if 15 units of gold were consumed in this period? ________________________________________ (e ) [2 pts] What is the present value of net benefit in Period 1 if 5 units were consumed in this period? ____________________________________

Marginal Not Benefits in Period 1 (dollars per unit) Present Value of Marginal Net Benefits in Period 1 Marginal Net Benefits in Period 2 (dollars per unit) 5.45 5 Prosent Value of Marginal Not Benefits in Period 2 3 3 2 A F D 2 D E B Quantity in Period 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity in 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 Period 2 Marginal Not Benefits in Period 1 (dollars per unit) Present Value of Marginal Net Benefits in Period 1 Marginal Net Benefits in Period 2 (dollars per unit) 5.45 5 Prosent Value of Marginal Not Benefits in Period 2 3 3 2 A F D 2 D E B Quantity in Period 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity in 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 Period 2