3. This question requires use of the computer simulation program discussed in class (see lecture slides on HuskyCT). (a) Using the demand curve P I 40 ~ 2Q, unit cost of extraction c = 2, initial resource stock size i : 20 and discount rate r = 0.1, perform computer simulations to determine the time paths of output and price in Hotelling's model. Please copy and paste the graphs for the two time paths to a Word document in order to provide a print-out with your answer. [10 points] (b) Change the discount rate to 5% (i.e. r = 0.05). Provide a print-out of the resulting time paths of output and price. What is your intuitive explanation for these outcomes? What happens to the value of marginal user cost (at t = 0) reported by the program? Why? [10 points] (c) Starting from the baseline scenario in 3(a), change the total resource stock available initially to X = 30. Provide a print out of the resulting time paths of output and price. What is your intuitive explanation for these outcomes? What happens to the value of marginal user cost (at t = 0) reported by the program? Why? [10 points] ((1) Startng again from the baseiine scenario in 3(a), allow a backstop technology such as solar energy (i.e., substitute renewable resource) to be available at unit cost 30. Provide a print out of the resulting time paths of output and price. What is your intuitive explanation for these outcomes? What happens to marginal user cost (at t = O) and present value of total net benefit reported by the program? Why? [10 points]