QUESTION 1. At the optimum, what is the margin (in $/B) for oil produced in year 1? (round your answer to 2 decimals) QUESTION 2. Suppose the budget needs to be reduced; at optimum, how much oil can be extracted with a budget of $200 million? Round your answer to one decimal place.

An oil company must determine how many barrels of oil to extract during each of the next two years. If the company extracts x2 million barrels during year 1, each barrel can be sold for 80 - X1 dollars. If the company extracts X2 million barrels during year 2, each barrel can be sold for 85 - X2 dollars. The cost of extracting X7 million barrels during year 1 is 2x12 million dollars, and the cost of extracting x2 million barrels during year 2 is 3x2 2 million dollars. A total of 20 million barrels of oil are available, and at most $250 million can be spent on extraction. Determine how the company can maximize its profit (revenues less costs) for the next two years. An oil company must determine how many barrels of oil to extract during each of the next two years. If the company extracts x2 million barrels during year 1, each barrel can be sold for 80 - X1 dollars. If the company extracts X2 million barrels during year 2, each barrel can be sold for 85 - X2 dollars. The cost of extracting X7 million barrels during year 1 is 2x12 million dollars, and the cost of extracting x2 million barrels during year 2 is 3x2 2 million dollars. A total of 20 million barrels of oil are available, and at most $250 million can be spent on extraction. Determine how the company can maximize its profit (revenues less costs) for the next two years