Suppose a tax on the extraction of a depletable resource is enacted and it will first take effect 10 years in the future. This resource is assumed to have a renewable, constant MEC substitute that will remain untaxed.

a. For a depletable resource characterized by a constant MEC how would, if at all, this pending law affect the extraction profile over time in terms of both the timing of the extraction and the cumulative amount extracted? Why?

b. If the depletable resource is characterized by an increasing MEC, how would your answer in

(a) change, if at all? Why?