Quiz for ECON 4535 - Natural Resource Economics at Colorado (CU)

Quiz Information

Material Type:Quiz 1
Class:ECON 4535 - Natural Resource Economics
University:University of Colorado - Boulder
  • Secondhand Smoke
  • On Account of
  • Because Of
  • Natural Areas
  • Externalities
  • Externality
  • Generations
  • Provided That
  • Distinction
  • Individuals
  • Allocations
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Sample Document Text

First Quiz Econ. 4/5535 -Natural Resource Economics I. An Introduction to NR Economics 1. (6 points) Assume a world that consists of two time periods. Denote the individuals in period 1 as generation 1, and denote the individuals in period two as generation 2. Assume a world of just two goods, cases of beer and copies of the book David Copperfield. Further assume individuals in generation 1 are willing to trade beer for books at the rate of 2 cases for one book, and generation 2 is willing to trade beer for books at the rate of one case for one book. Currently each generation has 10 cases of beer and 10 books. Is the current intertemporal allocation of beer and books efficient? Explain. (Assume books and cases of beer are divisible. For example, generation 1 would trade one case of beer for a half of a book and generation 2 would trade a half of a book for a half of a case.) Answer: No, it is not efficient because it is possible to change the allocation of beer and books between the t...

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