For each set of parameter values:
- Calculate the optimal time to extract the resource - How do you find switchpoint/ transition point?
- Calculate the Extraction path (Q0, Q1, etc.)
- Calculate the MUC in each period - HOW DO U FIND MUC?
- Calculate the optimal price in each period.
- Graph each of these over time.
You need to say what the subject is, and then complete the question
Subject for the question is from the subject Envoronmental Economics:
For each set of parameter values:
- Calculate the optimal time to extract the resource - How do you find transistion/switch point?
- Calculate the Extraction path (Q0, Q1, etc.)
- Calculate the MUC in each period - How do you find MUC?
- Calculate the optimal price in each period.
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- Graph each of these over time.
You can use the spreadsheet (webct) for the calculations.
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For each set of parameter values:
- Calculate the optimal time to extract the resource
- Calculate the Extraction path (Q0, Q1, etc.)
- Calculate the MUC in each period
- Calculate the optimal price in each period.
- Graph each of these over time.
You can use the spreadsheet (webct) for the calculations.
I am currently trying to complete the homework due for today and I need help.
- Is the below equation used to find MUC? If not how do I find?
MUC = MBt– MC
- How do you find Switch point/transition point? Does this answer the question for finding the optimal time to extract the resource?
- Are we using both tabs in the spreadsheet or only the Backstop tab?
- If only using the backstop tab it appears I only need to change the TS, Interest rate and MBb values. Are there any other modifications needed on this on this worksheet to gain proper calculations?
- How do I calculate the extraction path?
- How do I calculate the optimal price in each period?
- For my graphs what should my vertical axis be? I know my horizontal will be T(time)
I am currently trying to complete the homework due for today and I need help.
Is the below equation used to find MUC? If not how do I find?
MUC = MBt– MC
How do you find Switch point/transition point? Does this answer the question for finding the optimal time to extract the resource?
Are we using both tabs in the spreadsheet or only the Backstop tab?
If only using the backstop tab it appears I only need to change the TS, Interest rate and MBb values. Are there any other modifications needed on this on this worksheet to gain proper calculations?
How do I calculate the extraction path?
How do I calculate the optimal price in each period?
For my graphs what should my vertical axis be? I know my horizontal will be T(time)
To find the switchpoint or transition point, you will need to perform an optimization analysis based on the given parameter values. The switchpoint is the point at which it becomes more profitable to extract the resource rather than leaving it unused.
Here's a step-by-step approach to finding the switchpoint:
1. Define a mathematical function that represents the profitability of resource extraction over time. This function usually takes into account factors such as extraction costs, resource price, and discount rate. Let's call this function "Profit(t)".
2. Choose a range of time periods, from an initial starting point to a final ending point. Divide this time range into smaller intervals (e.g., 1-year intervals) based on the nature of the problem.
3. For each time interval, calculate the net present value (NPV) of extracting the resource using the formula: NPV = Profit(t) / (1 + (discount rate))^t
4. Repeat Step 3 for every time interval until you find the point where the NPV becomes positive for the first time (i.e., the switchpoint). This indicates that it becomes profitable to extract the resource at this time.
To calculate the extraction path (Q0, Q1, etc.), you need to consider the optimal amount of resource extraction for each time period. This can be determined by solving an optimization problem that maximizes the net present value (NPV) of extraction, subject to constraints such as resource availability and extraction capacity.
To calculate the MUC (Marginal Unit Cost) in each period, you can divide the change in the net present value of extraction (NPV) by the change in the amount of resource extracted (Q). Mathematically, MUC = ΔNPV / ΔQ.
To calculate the optimal price in each period, you will need to consider factors such as supply and demand dynamics and the relationship between price and quantity demanded or supplied. This calculation may require a market model or forecasting techniques, depending on the parameters of the problem.
Finally, to graph each of these variables over time, you can plot them on a graph, with time on the x-axis and the respective variable (e.g., NPV, MUC, price) on the y-axis. This will allow you to visualize the changes in these variables over the specified time period.