For This Example The Total Supply For Both Time Periods Is Fixed It Is A Nonrene

Homework 4 part c section 1 section 2 section 3 discount rate 4%

C .For this example , the total supply for both time periods is fixed ( it is a nonrenewable resourceafter all ) at 120 tons and the discount rate is 4% per year ( hint , ( 1 . 04 )35 is about 4 , so if youdivide the current marginal benefit by this , you will get the future marginal benefit ) .i. ( 6 points ) Estimate how much copper would be consumed in each time period .ii . ( 4 points ) Estimate the marginal user cost for this efficient allocation of copper .ini . ( 6 points ) Draw the marginal net benefit ( MNB) curve for the current period andthe future period ( both the discounted and undiscounted MNB for period 2 ) using*the graph below . Where the curves intersect indicates the amount of productionthat should occur in each time period .Marginal Net Benefit of Copper Production in Two PeriodsCooper Production Period 212010080604020O45AS40403535303025MNB Period 1MINB Period 2201510105OO20406080100120Copper Production Period 1 ( tons )2 of 2

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