Q₁0 Q₂ 120 B The graph above shows the potential ways to alloc with a total supply of 120 million tons. The curve t generation and MNB₂ shows the marginal net ben market for the resource were allowed to go to equi much of the resource would be consumed in the s 0 tons

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Q₁0
Q₂ 120
MNB₁
0 tons
20 million tons.
A
50 million tons
60 million tons
100 million tons
B
70
50
C
MNB₂
D
100
20
E
The graph above shows the potential ways to allocate a nonrenewable resource across two generations
with a total supply of 120 million tons. The curve MNB, shows the marginal net benefits in the current
generation and MNB₂ shows the marginal net benefits in the second generation after discounting. If the
market for the resource were allowed to go to equilibrium in the first generation, without any regulation, how
much of the resource would be consumed in the second generation?
s
120
0
Transcribed Image Text:Q₁0 Q₂ 120 MNB₁ 0 tons 20 million tons. A 50 million tons 60 million tons 100 million tons B 70 50 C MNB₂ D 100 20 E The graph above shows the potential ways to allocate a nonrenewable resource across two generations with a total supply of 120 million tons. The curve MNB, shows the marginal net benefits in the current generation and MNB₂ shows the marginal net benefits in the second generation after discounting. If the market for the resource were allowed to go to equilibrium in the first generation, without any regulation, how much of the resource would be consumed in the second generation? s 120 0
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