Assume the price of one cubic meter of timber is $1,500 and it costs $100 to harvest it. Consider a forest where the stock of timber evolves according to V(t)=10t+t^2-.01t^3 where t denotes years after planting. Assume the cost of replanting trees after harvest is $100,000 and the site value of the land is $1,000,000. The risk-free interest rate equals 3%.

a) According to the Wicksell rotation rule should the forest be harvested when t=42? Explain.

b) According to the Faustmann rotation rule should the forest be harvested when t=42? Explain.

c) In general, how do the Wicksell and Faustmann rule compare to each other?

d) Assume now that there are nontimber forest benefits that are valued at $300,000. According to the modified Faustmann rotation rule should the forest be harvested when t=42?

e) What could be an unintended consequence, globally, when environmentalists in the US and Canada advocate for longer harvest periods of forests in the US and Canada?