Problem
To anticipate subsequent chapters where more complicated renewable resource models are introduced, consider a slight modification of the two-period depletable resource model. Suppose a biological resource is renewable in the sense that any of it left unextracted after Period 1 will grow at rate k. Compared to the case where the total amount of a constant-MEC resource is fixed, how would the efficient allocation of this resource over the two periods differ? (Hint: It can be shown that MNB1/MNB2 = (1 + k)/(1 + r), where MNB stands for marginal net benefit.)
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.