Suppose the Marginal Benefit and Marginal Cost for crude oil at any given period is MB = 380-3Q and MC = 28 + 1Q Where price is measured in dollars and quantity is measured in barrels. Assume the following: • The total oil reserve is 120 tons • There are 2 periods, 11 years apart

Suppose the Marginal Benefit and Marginal Cost for crude oil at any given period is MB = 380-3Q and MC = 28 + 1Q Where price is measured in dollars and quantity is measured in barrels. Assume the following: • The total oil reserve is 120 tons • There are 2 periods, 11 years apart

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15: Contracting, Governance, And Organizational Form

Section: Chapter Questions

Problem 8E

See similar textbooks

Related questions

Q: If you earn $130,0000, what is the marginal tax rate? Taxable income ($) $0-$50,000 Tax (%) 7% 5.84%…

A: The marginal tax rate is the amount of additional tax paid for every additional dollar earned as…

Q: MP Curve Real Interest Rate, r (percent) G OK to G OK to F O G to J OH to I Inflation Rate,…

A: The financial crisis in 2007 in the U.S. resulted due to the collapse of the housing market. The…

Q: Based upon the graph below as LASO moves to LAS1

A: The Long Run Aggregate Supply curve will shift to the right with respect to better technology,…

Q: The European Economic and Monetary Union (EMU) was formed to O allocate different currencies to…

A: European Economic and monetary Union (EMU) was launched in 1992. It was formed to adopt a common…

Q: 8. The goods and money markets are in equilibrium at point/s a. a b. b C. C d. a and b b •C X Figure…

A: According to the IS-LM model, the equilibrium is achieved when the IS curve intersects the LM curve…

Q: CSUN receives a $15 million grant to train middle and high school science and math teachers. The…

A: The benefit-cost ratio is one of the measures to compare the benefits of an alternative with its…

Q: a competitive market, the following supply and demand equations are given: Supply P = 5 + 0.36Q…

A: The above question is based on the supply and demand question. Here supply is an upward-sloping…

Q: Assume you can purchase a 3 bedroom rental townhome for 350,000. The down payment required is 15%.…

A: Given, Initial Cost = 350,000 Down Payment = 15% Loan Term = 5% for 30 Years Property Tax = $1,350…

Q: Each year, AT&T loses 1% of its customers to Verizon and 1% of its customers to T-Mobile. In that…

Q: Multinational companies (MNC) engaging in technological transfer may lead to gains elsewhere in the…

A: If a company operates in at least one country other than its own, it is referred to as a…

Q: e’ve observed that there are few examples of perfectly competitive markets in the real world, yet we…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Given our complete frugal governed open economy model of the US with flexible exchange rates, if…

A: Aggregate demand curve depicts inverse relationship between price level and total output in the…

Q: Suppose the money market for some hypothetical economy is given by the following graph, which plots…

A: According to Liquidity Preference Theory, investors seek progressively bigger premiums on medium and…

Q: Planned expenditures increase when there is a reduction in taxes decrease when disposable income…

A: Planned expenditure refers to the spending by households, firms, and the government that is planned…

Q: "Internalisation advantages" as implied by Dunning's "Eclectic Paradigm" are the benefits of…

A: Internalization is the process through which a business seeks to replicate foreign procedures…

Q: A company's MARR is 10% per year. Two mutually exclusive alternatives are being considered. Compare…

A: The annual worth is the net of all the benefits and costs caused more than a one-year time span. In…

Q: Figure 8.1 shows the marginal pollution control costs per ton for a firm that would pollute at Qmax…

A: A pollution tax is a component of an economic mechanism designed to reduce pollution and its…

Q: Jupiter Co. has the following revenue and cost information: Selling Price $ Variable Cost $ Variable…

A: Given information, Selling price = $15 per unit Variable cost = $4.53 per unit Fixed cost = $359,000…

Q: QUESTION 2 Think the two-period model for coals. Suppose a demand schedule is P = 80 - 0.5Q and a…

Q: In the long run equilibrium of a competitive market, the number of firms in the market adjusts until…

A: All firms get only normal in the long run under the perfectly competitive market. The super normal…

Q: A good's demand is given by: P = 669 - 2Q. At P = 82, the point price elasticity is: Enter as a…

A: The price elasticity of demand at a given point on the demand curve is referred to as "point…

Q: 2. An independent contractor is trying to decide whether to lease new equipment now or save his…

A: The change in the price level is not taken into account if there is no inflation adjustment.…

Q: Which of the following is NOT a category of fiscal policy? Government policies regarding the…

A: Government's fiscal policy is a policy relating to government's expenditure and finance.It is the…

Q: Critically discuss the determinants of price elasticity of supply

A: The term "elasticity of supply" refers to the quantitative relationship between a commodity's price…

Q: A proposal is being considered to improve an existing roadway condition by resurfacing the road to…

A: The net present value of a project refers to the present value of the benefits to be received in the…

Q: For Nos. 48-50. A special purpose machine is to be acquired by paying a P15.000 initial cash payment…

A: Given, Initial Cost = P15,000 Debt = P135,000 Cash Inflow = P40,000 Useful Life = 10 Years MARR =…

Q: QUESTION 31 Who has the comparative advantage the U.S. or the World in producing airplanes based…

A: Opportunity cost is the cost of producing one good in terms of other. Opportunity cost shows the…

Q: QUESTION 18 If country A had a smaller underground economy than country B, and country A's citizens…

A: It is given that country A had a smaller underground economy than country B Country's A citizens…

Q: Refer to Table 5. In Germany, the opportunity cost of 1 case of beer is O 2 cases of wine. O 1/2…

A: Opportunity cost for a good refers to the opportunity that is lost while choosing some other…

Q: 3. What is the difference between D/P at sight and D/P after sight. Why "D/P after sight" is not…

A: The terms "D/P at sight" and "D/P after sight" are related to the terms of payment used in…

Q: How does an option differ from the other derivative instruments?

A: A financial contract known as a derivative derives its value, risk, and fundamental term structure…

Q: Country A can produce either 200 personal computers or 800 tons of potatoes with the same amount of…

A: (1). Country B has the absolute advantage in producing personal computers because it produces 300…

Q: The social cost of a monopoly is equal to its Question 13 options: a) fixed cost b)…

A: There is a major difference between perfect competition and monopoly. Under perfect competition, the…

Q: You quit your job as an analyst making $50,000. You then take your $500,000 in savings and open a…

A: An economic profit or loss is the difference between the price of a product's selling profits and…

Q: When a bank has unplanned reserves A. it can create money. OB. it can make loans. OC. it has too…

A: In the banking sector, unplanned reserves is considered as a part of excess reserves held by banks,…

Q: The manufacturer of electronic fans is trying to decide what price to set for its product. The…

A: Given information: P = 90 - 2.5Q ------> Demand function TC = 80 + 60Q - 1.5Q2 ---------> Cost…

Q: What insights do welfare analysis (consumer surplus/producer surplus) offer into international…

A: International trade refers to when an economy is open to trade with the rest of the world by selling…

Q: Billie's Bank has cash of $25,000, securities of $10,000, and loans of $15,000. How much does it…

A: The phrase "deposit" refers to money that is kept in a financial institution, specifically a bank. A…

Q: Refer to Table 6. If the exchange rate is $1 = 3 euros, then O the United States will import carrots…

Q: Question 4 Refer to the information provided in Table 22.6 below to answer the question(s) that…

A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: The MP curve may be used to represent how movements of the real interest rate are related to the…

A: What is an MP curve? The Monetary Policy curve (MP) determines effective changes in the economy's…

Q: Question 7 Demand for real money balances depends on O the real interest rate the opportunity cost…

A: In an economy, real money balance refers to the market value of money held with the public.

Q: 1. Positive feedback loops 1. Consider two variables: X and Y. True or False: A positive feedback…

A: Positive feedback loops are instances where two events reinforce one another. Here, just a little…

Q: Give an example, real or imaginary, of an adverse selection problem. Your example must clearly…

Q: Use the cost curves below to answer the following questions. 120 90 80 70 40 30 200 250 300 500 MC…

A: In perfect competition, A firm will produce where P = MC P is the market price MC is the marginal…

Q: An independent contractor is trying to decide whether to lease new equipment now or save his money…

A: The change in the price level is not taken into account if there is no inflation adjustment.…

Q: The table given below represents the payoff matrix of firms A and B, when they choose to produce…

A: Given the payoff,

Q: 1. At an output level of $1200 billion there is an unplanned inventory change of 2. At an output…

A: OutPut (Real GDP (Y) Consumption Spending Net Taxes Investment Spending Government Spending 400…

Q: Identify the cost of inflation described. The cost of wheat has gone up down to a drought, so local…

A: The amount that a collection of products and services have increased in price during a specific time…

Q: A 3-year-old manufacturing equipment, which has a present market value of $13,000, is being…

A: Given, Present Value = $13,000 Economic Life = 3 years Interest Rate = 10% Year MV AOCj 1 $9000…

Question

Now, assume that society like to allocate the reserve efficiently across both periods.

B: If the discount rate is Zero (0%), what should be the optimal allocation for the 2 periods?

C: Now assume the discount rate is 5.5%, what should be the optimal allocation for the 2 periods?

Suppose the Marginal Benefit and Marginal Cost for crude oil at any given period is
MB = 380 – 3Q and MC = 28 + 1Q
Where price is measured in dollars and quantity is measured in barrels. Assume the following:
• The total oil reserve is 120 tons
• There are 2 periods, 11 years apart
• MB and MC are the same in both periods
Resource Allocation, Part A:
If the first period is ONLY interested in maximizing its own welfare and no restriction is imposed,
how much will each period end up consuming? (i.e. what is Q₁ and Q2)?
barrels and Q2
Q₁
=
barrels

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

How many barrels can the first period consume before any User Cost occurs?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Mindlap Cengage Leaming n/static/nb/ui/evo/index.html?deploymentld%3D5981412353502464190243042516&elSBN=9780357133576&id%3D14420886 CENGAGE MINDTAP Module One Quiz Show what happens to the production possibilities frontier (PPF) if an epidemic reduces the population of the society. PPF PPF Quantity of Industrial Output 79°F Su Quantity of Agricultural Output
2. Let the global demand q (in thousand-tonnes per day) for one partic- ular metal be related to the price p in thousand-dollars per tonne by p = D(q) where the demand function is D(q) = 50¹-0.01g (a) Calculate D(60) and interpret your answer in context. (b) Calculate D'(q). (c) Calculate D'(60) and interpret your answer in context.
8:49 il LTE https://undergrad.unilus.app/pluginfile... O ... Combination 2 Combination 3 Country B Efficient Attainable Unattainable Inefficient Combination 1 K M N Combination 2 R Combination 3 T U (22 Marks) b) Which country has an absolute advantage in production of wine? Justify your answer with empirical evidence. (2 Marks) c) Which country has an absolute advantage in the production of clothes? Justify your answer with empirical evidence. (2 Marks) d) Which country has a comparative advantage in the production of wine? Justify your answer with empirical evidence. (4 Marks) e) Which country has a comparative advantage in the production of clothes? Justify your answer with empirical evidence. (4 Marks) f) If both countries specialize in the production of the item they are good at, draw the PPF for the condition where trade can take place. (6 Marks) (TOTAL: 40 MARKS)
esc Week 6 Writing Assignment ← C k Wagner Portrait Gro... Racheal Marie ✓ ✰ My Home Courses BERental Options Week 6 Wiritng Assignment - Go X ng.cengage.com/static/nb/ui/evo/index.html?deploymentid=5981412470581061040044530160&eISBN=9780357133576&id=1581151212&snapshotld-31... disney plus custom.... Catalog and Study Tools College Success Tips Career Success Tips RECOMMENDED FOR YOU ? Help Give Feedback F X « Academic Integrity: Avoiding Plagiarism USPS.com® - USPS... Manage Your Walm... MindTap - Cengage Learning CENGAGE MINDTAP Homework(Ch 27) 4. Using the rule of 70 Growth Rate (Percent) 6 X 7 8 Scoutbook Using the rule of 70, determine the number of years it will take the economy to double at each growth rate. C + Consider an imaginary economy that has been growing at a rate of 6% per year. Government economists have proposed a number of policies to increase the growth rate but first need to convince the president that the policies will pay off. To do so, they want to present a…
Compare and contrast the difference between dynamic (intertemporal) efficiency and static efficiency with respect to non-renewable resources. a. What are the efficiency conditions for each? Explain your answer. b. What costs reflected in the inter-temporal analysis are not captured in the static analysis? Explain your answer. c. How does the discount rate factor into each analysis? d. What impact does the discount rate have on the allocation of non-renewable resources across time and long run price path of non-renewable resources? e. Discuss the ethical issues associated with economists use and choice of a discount rate when analyzing natural resource and environmental problems.
same opcions in the first blank space
discuss the impacts of modern discoveries as substitutes of conventional resources. This is the time of unpredictability and uncertainty, as more efficient resources have been discovered, discuss with logical arguments about preserving the country resource for future is a rationale strategy??
If a new competitor enters the Chinese market in the near future that couldbring more intense price pressure, how would that affect future investment decisions?
International Production You have two factories that produce identical products (lets say plastic forks). The plants and equipment are fullydepreciated and there are no fixed costs. Note, this is a competitive market. As a result, your cost basis in the USA is TC usa = 16Y usa^2your cost basis in CHINA is TC china = 2Y china^2The demand for plastic forks is Y=72Note, the production then becomes Y = Y usa + Y china = 72 a. With no restrictions (competitive markets exist) how many plastic forks will the USA produce? b. How much would China need to lower their cost to produce all of the 72 plastic forks? c. How much of a subsidy would the firm need to produce all 72 plastic forks in the USA, given the original TC functions?
myUT x ← → C : Shontrell ✓ ◆ My Home O Courses ? Help Conte X b Econic x Using X O micro x G In this x ng.cengage.com/static/nb/ui/evo/index.html?deploymentId=59843379946929954870904&elSBN=9780357133699&snapshotId=3439015&id=1773303992& Catalog and Study Tools Rental Options College Success Tips Career Success Tips Give Feedback Mind X « CENGAGE MINDTAP Homework (Ch 04) Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per kettle) 80 72 64 56 48 40 24 16 8 0 The equilibrium price in this market is $ Supply M Demand 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Kettles) I 31 supp X C Home X ● Econ1 x C Graph Input Tool Market for Kettles per kettle, and the equilibrium quantity is Price (Dollars per kettle) Quantity Demanded (Kettles) M 24 500 Quantity…
7ñ Characterize the different types (interconnected, multidirectional, conflicting, reverse, etc.) of global flows. What do they look like? What encourages them? What can impede them?
5. During the COVID-19 pandemic, a firm's revenue declines continuously so that the revenue, TR (measured in millions of pesos), in t years' time is modeled by TR=5e015t . (a) Calculate the current revenue and also the revenue in two years' time and (b) After how many years will the revenue decline to P2.7 million?