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Consider a two-period resource allocation model where the efficient allocation implies undiscounted total surplus of $80 and $69.50 in the first and second periods, respectively.
Consider a two-period resource allocation model where the efficient allocation implies undiscounted total surplus of $80 and $69.50 in the first and second periods, respectively. Assume the rate of return on investment is 10 percent. The smallest possible intergeneration transfer that will make the efficient resource allocation sustainable is:
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