Problem
a. Consider the effect of population growth on the allocation on the dynamic efficient allocation of a depletable resource across time. Suppose we have two versions of the two-period model, discussed in this chapter, that are identical except for the fact that the second version involves a higher demand for the resource in the second period (the demand curve shifts to the right due to population growth) than the first version. What effect would the higher demand in the second period have on the allocation between the two periods and the magnitude of the present value of the marginal user cost?
b. Explain the intuition behind your results
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.