All

(non-physical) units are in European units of utility. The social welfare function is discounted utilitarian in form, with a social utility discount rate of 0.1. Given that the objective is to maximise social welfare over periods 0 and 1,

calculate the amounts of resource that should be extracted in each period, subject to the restriction that at least 104 units of the resource should be left (unextracted) for the future at the end of period