Consider the following two-period model of dynamically efficient extraction of a non-renewable natural resource. The constant social marginal cost of extraction is 40 in each period and the total stock of the resource is Q = 300 units. Moreover, the social marginal benefit is MB(Qt) = 200 - Qt, where Qt is the quantity of resource extracted in period t, for t = 0; 1. The discount factor is 0.8. What is the efficient quantity of resources extracted in each period? Provide a graphical representation of the solution.

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