Which of the following would NOT lead to an efficient allocation between two tim
ID: 1155964 • Letter: W
Question
Which of the following would NOT lead to an efficient allocation between two time periods? Maximize the present value of the net benefit received in the two time periods. Maximize the present value of the marginal net benefit from the last unit in Period 1 equaling the marginal net benefit in Period 2. Try all combinations of allocations between the two periods and choose the one that maximizes net benefit between the two periods. Maximize the net benefit in Period 1 and allocate the remaining resources in Period 2.
Explanation / Answer
The answer is the last point - Maximize the net benefit in Period 1 and allocate the remaining resources in Period 2.
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