Consider a nonrenewable resource that can be consumed either today (period 1) or tomorrow (period 2) and has a finite supply of 5 units.Assume the inverse demand for the resource in both periods is:

P_1 = 18 - 2Q_1

P_2 = 18 - 2Q_2

Assume the marginal cost of extracting the resource is constant at $6 and the socialdiscount rate is 15 percent (r= .15).

What is the efficient level of consumption in period 2?