Assume again that we have a simple 2 period model of dynamically efficient extraction of a nonrenewable resource with a finite stock of 35 units. Constant marginal extraction costs remain at 8. And the interest rate is 8%. We now know that due to technological change, demand for the resource will decrease in period 2. Hence, there are now different demand functions for each period. In particular, inverse demand functions for the 2 periods are: P1= 20- 0.4q1 P2= 22- 0.4q2 What quantity should be extracted in each period? What is the optimal price of the resource in the 2 periods?

Suppose there is a nonrenewable resource with inverse demand function p= 30-0.8q and with marginal extraction costs (MEC)= 8. The resource stock, S is finite and = 35 units. Suppose the time horizon is 2 periods and the discount rate is r= 8%. What quantity should be extracted in each period? What is the optimal price of the resource in the 2 periods?

hi i need help with part b i and ii. Here are the previous steps from part a.

Consider the following Cobb-Douglas production function for the bus transportation system in a particular city: Q=aL B₁F B₂K B₂ where L = labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus miles. Suppose that the parameters (a, B₁, B2, and B3) of this model were estimated using annual data for the past 25 years. The following results were obtained: a = 0.0012; B₁ = 0.45; B₂ = 0.20; and B3 = 0.30. Determine the labor, fuel, and capital input production elasticities. Input Production Elasticities Labor Fuel Capital Suppose that labor input (worker hours) is increased by 1% next year (with the other inputs held constant). What is the approximate percentage change in output? Suppose that capital input (number of buses) is decreased by 3% next year (when certain older buses are taken out of service). Assuming that the other inputs are held constant, what is the approximate percentage change in output? %…