What is the shadow price in period zero

Assignment Help Business Economics

Reference no: EM13852867

Consider the allocation of a delectable resource over two periods. There are Qbar=4 units of the stock available. The total benefits derived from using the resource are defined as TBt= 20qt- (1/2qt^2) and the total cost of extracting the resource is defined as TCt=5qt

What are the values of q0 and q1 that maximize the net benefits of using the resource if the discount rate is 10%? What if the discount rate is 5%?

Now suppose there are Qbar = 30 units of the stock available. How do the answers to part (a) change? What is your intuition?

What is the shadow price in period zero?

Reference no: EM13852867

Questions Cloud

Budget line and highest attainable indifference curve : Paula has set aside $60 monthly budget to attend plays and watch movies. She likes plays exactly three time as much as she likes movies. (Plays and movies are perfect substitutes with 1 to 3 ratio.) Draw her indifference curves. If plays tickets cost..

What is the optimal two-part price : Suppose that VerizonWireless has hired you as a consultant to determine what price it should set for calling services. Suppose that an individuals' inverse demand for wireless services in the greater Boston area is estimated to be P = 100 - 33Q and t..

Creating a measurable marketing and advertising strategy : In your simulation this week, one item that you will be working on is advertising to include ad copy design, and media placement and ad frequency.

Majority voting to determine amount of public good : “If the assumptions of the median voter model hold, then using majority voting to determine the amount of a public good purchased by a city will lead to either an efficient level of the public good being provided or an under-provision of the public g..

What is the shadow price in period zero : Consider the allocation of a delectable resource over two periods. There are Qbar=4 units of the stock available. The total benefits derived from using the resource are defined as TBt= 20qt- (1/2qt^2) and the total cost of extracting the resource is ..

What a certified industrial hygienist can earn certification : Explain why it is important to determine whether training can solve a safety problem. Why is it important to have a written procedure for sampling methods. List three examples of what a certified industrial hygienist can do to earn certification main..

The clayton act prohibits price discrimination : One reason firms in monopolistic competition can charge different prices is that their products are identical 2 similar 3 differentiated 4 guaranteed. The Clayton Act prohibits price discrimination. In monopolistic competition, there is no need for..

Critical components of the conceptual nursing model : Write a 750-word overview of the theoretical framework of your selected theorist. Include an analysis of the critical components of the conceptual nursing model and theory used in nursing

Differences between economic and accounting concepts of cost : What are the differences between economic and accounting concepts of cost? How are prices determined under perfect competition? How are prices determined under monopoly?

User Account

All Pages