Question 1(2 points)
In equilibrium, consumer surplus is $25, producer surplus is $12.50, and variable cost is $37.50.
Total benefits from consuming the equilibrium quantity is
A. ＄75
B. ＄37.50
C. ＄25
D. ＄0
Question 2(2 points)
The higher the discount rate, the higher the importance of current net benefits.
A. True
B. False
Question 3 (2 points)
Consider a two-period model of optimal resource depletion.A decrease in the marginal extraction
cost in Period 1 will _____ the marginal opportunity cost of present consumption; consumption
should shift to the___。
A. decrease;present
B. decrease; future
C. increase;present
D. increase; future
Question 4 (2 points)
The diagram depicts a two-period, non-renewable resource model. Assume that {q0 tilda, q1
tilda} is the market extraction path. To increase PV NB to society,
The diagram depicts a two-period,non-renewable resource model.Assume that {q0 tilda, q1 tilda}
is the market extraction path. To increase PV NB to society,
consumption should shift to the
A. present because MUCO<PV MUC1
B. future because MUCO<PV MUC1
C. present because MUCO>PV MUC1
D. future because MUCO>PV MUC1
Question 5(2 points)